MILAN (Reuters) - Shares in Italian bank UniCredit fell as much as 5% on Monday, hit by concerns over leadership and strategy as Chief Executive Jean Pierre Mustier’s three-year term looms large.
Directors at Italy’s second-biggest bank held informal discussions on Sunday before starting nominee selection this week for the board’s renewal in April 2021 against the backdrop of reported internal friction over strategy and whether Mustier will remain at the helm.
Government efforts to find a buyer for bailed-out Monte dei Paschi have become the latest flashpoint, sources have said, because UniCredit had been identified as the ideal partner because of its robust balance sheet.
Shares in Monte dei Paschi rose as much as 9%, lifted by expectations that a potential Mustier departure would clear the path to an acquisition.
After fruitless attempts to strike a cross-border merger, Mustier has vowed to steer clear of consolidation, even as matchmaking in Italy’s fragmented banking sector intensifies.
Poste Italiane on Monday quashed rumours that CEO Matteo Del Fante could be among candidates to replace Mustier, whose stance is out of step with growing merger activity in southern Europe after Intesa Sanpaolo’s surprise summer takeover of UBI.
Credit Agricole last week announced a buyout offer for third-tier Italian lender Creval while Banco BPM has welcomed merger overtures from the top investor in BPER Banca.
Investment banker Mustier arrived in mid-2016 to fix UniCredit’s capital woes. He presided over a turnaround, cleaning up the balance sheet and raising tens of billions of euros from asset and share sales.
He has failed, however, to lift its share price. UniCredit trades at a 60% discount to its book value and a plan to return cash to shareholders has been derailed by a pandemic-related regulatory ban on dividends.
“We are neutral on UniCredit as the story – attractive on valuation – is lacking a catalyst, as we see capital return as a remote possibility in the near term,” Mediobanca Securities analyst Andrea Filtri said in a note.
Filtri said that a Monte dei Paschi deal could be compatible with Mustier’s capital return strategy if structured to neutralise the impact on UniCredit’s core capital.
Italy’s Treasury is working on a package of incentives to entice a buyer.
($1 = 0.8351 euros)
Additional reporting by Giancarlo Navach, Gianluca Semeraro and Andrea Mandala; Editing by Simon Cameron-Moore and David Goodman
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Shares in UniCredit down 4.5% hit by concerns over CEO's future - Reuters
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