MILAN, Jan 12 (Reuters) - Shares in UniCredit slid further on Wednesday after a person familiar with the matter said Italy's second-biggest bank was among potential suitors https://www.reuters.com/article/otkritie-m-a-unicredit/italys-unicredit-among-suitors-for-russias-otkritie-bank-source-says-idUSKBN2JL1OI looking at Russia's Otkritie Bank.

By 0835 GMT, UniCredit shares were down 1.9% against a flat Italian banking index. The stock dropped 1.1% on Tuesday, bucking a higher sector.

Russia's central bank, which owns Otkritie following a 2017 bailout, is looking to divest its stake either through a sale or a bourse listing.

With 45 billion euros in assets, Otkritie is Russia's seventh-largest bank and a merger would increase five-fold UniCredit's risk-weighted assets in the country.

UniCredit has been operating in Russia since 1989 through AO UniCredit Bank, one of the country's largest commercial banks.

Despite the attractive returns delivered by Russian lenders, analysts flagged the geopolitical risks associated with an enlarged presence at a time of flaring tensions between Washington and Moscow over Ukraine.

Otkritie doubled its profits in January-September 2021 with a return on equity (ROE) of 14.7%, versus the 6.1% ROE of euro zone banks in the first quarter of 2021.

As a consequence, Russian lenders such as Sberbank trade at book value, while many European lenders offer a discount - thus providing a paper profit to an acquirer.

"UniCredit's interest in expanding in Russia runs counter to a trend in recent years in which foreign lenders scaled back their local presence as Western sanctions and compliance risks (money-laundering scandals) weighed on their business," Banca Akros said.

According to Jefferies "it is unclear to what extent any due diligence is being done more as normal management duty to shareholders versus a specific serious intent to pursue an acquisition."

Chief Executive Andrea Orcel said in December when presenting a new business plan that UniCredit would consider mergers and acquisitions in countries where it operates if it helped strengthen its franchise and meet its return targets.

"While this would strictly fit with UniCredit's stated guidance to consider 'in-market' consolidation opportunities, the news is likely to be met with some scepticism/caution given scale of the business (Otkritie equity around 6.5 billion euros) and potential implications for excess capital return," Jefferies said. (Reporting by Valentina Za and Andrea Mandala Editing by Mark Potter)