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Italian banking major Intesa Sanpaolo has reserved €800m to offset potential losses from the ongoing Russia-Ukraine war.

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The lender also slashed its profitability targets for the year from €5bn to €4bn.

In March this year, the lender revealed that its loan exposure to Russia and Ukraine stood at €5.1bn.

If the bank decides to increase the size of reserves to cover 40% of its Russia-Ukraine exposure then net income could fall in the range of €3bn.

“The outlook for 2022 is subject to fine-tuning in the coming months based on the evolution of the events involving Russia and Ukraine,” the lender’s statement read.

Of the bank’s total exposure, loans worth nearly €1.9bn are tied to the oil and gas industry.

Intesa Sanpaolo has around €200m exposure to individuals included in the specially designated nationals (SDN) list.

In Russia, Intesa Sanpaolo employs around 980 people through its subsidiary, Banca Intesa.

Pravex Bank, its Ukrainian subsidiary, has a headcount of 780.

Moscow’s decision to invade Ukraine and the subsequent retaliatory sanctions are making it near impossible for foreign banks to operate in Russia.

Last week, Intesa Sanpaolo’s peer UniCredit announced that it has set aside €1.3bn in reserves for exposure to Russia.

UniCredit, which has €1.9bn direct exposure to Russia, is conducting a review of its business in Russia as the bank is looking to leave the country.