London CNN Business  — 

UniCredit has dropped a potential bid for a Russian state-owned bank because of the escalating crisis over Ukraine.

CEO Andrea Orcel confirmed reports that the Italian bank was considering acquiring Otkritie when it goes public, but has since abandoned the project due to the “geopolitical environment.”

“We were indeed evaluating the possibility of contributing our Russian operations into Otkritie in exchange for a controlling stake to underpin its planned IPO,” Orcel said in an earnings call on Friday.

The deal would have placed both banks in a “stronger market position,” he said.

Concerns that Russia will invade its neighbor have intensified in recent days as thousands of its troops have massed at the border. The United States and European Union have threatened to impose unprecedented economic sanctions on Russia, which could hurt Western companies with high exposure to the country.

US lawmakers have suggested in recent weeks that Russia could be removed from SWIFT, a high security network that connect thousands of financial institutions around the world. This would make it nearly impossible for financial institutions to send money in and out of the country, delivering a sudden shock to its companies.

UniCredit was one of several Italian companies reported by the Financial Times to have met with Russian President Vladimir Putin in a video call on Wednesday to discuss closer business ties. The company declined to comment when approached by CNN Business.

UniCredit is deemed “systemically important” by the Financial Stability Board, a body set up following the 2008 financial crisis to monitor the global financial system, and is one of 115 banks directly supervised by the European Central Bank. It has a presence in 30 countries, including several in Eastern Europe.

The bank posted €3.9 billion ($4.3 billion) in underlying profit for 2021 on Friday, beating expectations.

Charles Riley contributed to this report.