Valentina Za, Giselda Vagnoni

MILAN (Reuters) – Two people familiar with the matter stated that UniCredit, an Italian bank, has expanded its search beyond the local market for a buyer to buy its Russian operations.

UniCredit met with bidders from local areas, but Western sanctions have made it difficult to reach an agreement. UniCredit extended the search to countries like India and China, which one source suggested could offer buyers for a deal.

A second source claimed that talks were being held with potential investors, but didn’t name them.

UniCredit’s shares surged more than 2% on Monday morning, surpassing the sector.

Andrea Orcel, UniCredit’s CEO, told analysts that Russian sanctions have progressively reduced chances of reaching a deal. “The window has been quite small.”

Russian businessman Vladimir Potanin told Interfax in May that his Interros holding company purchased Societe Generale’s Russian division Rosbank.

According to sources, the Italian lender is now looking for other options, although a Russian deal remains possible.

UniCredit spokespeople declined to comment.

China, India, and Turkey investors could be interested in assets with a lower price due to the departure of Western businesses following the Ukraine war.

UniCredit, Russia’s largest bank exposure is Europe’s number one. It also manages the nation’s 14th-largest lending institution.

Andrea Enria (Europe’s Chief Banking Supervisor) said on Friday that he believed the bloc’s banks would quickly support efforts to leave Russia.

Orcel is a former investment banker who used asset swaps to switch, for instance, a loan to Russia with a Russian loan to Europe. This was done to reduce Russia’s exposure.

Orcel claimed that UniCredit couldn’t sign any major agreements to lessen exposure due to sanctions on its counterparty just prior to the signing.

Orcel, however, dismissed any concerns regarding Russia this week and said that UniCredit was not at risk from Russia after the company booked 1.2 million euros ($1.3billion) in provisions for future losses.

UniCredit said that it’s evaluating every option, even an exit from Russia. Orcel however cautioned that the process of rescuing the bank will take some time due to the obligations of staff members and customers, as well the desire to keep shareholders happy.

($1 = 0.9330 euros)