MILAN (Reuters) – Shares in Italy’s UniCredit fell 4.5% on Monday hit by concerns about the future of Chief Executive Jean Pierre Mustier, whose mandate ends in the spring.
Directors at Italy’s no.2 bank held informal discussions on Sunday ahead of kicking off this week the process to select nominees for the renewal of the board in April 2021.
People familiar with matter have said friction over strategy within the bank has called into question whether Mustier will remain at the helm.
The 59-year-old former investment banker 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 share and asset sales.
He has failed however to lift the price of the shares, which trade at a 40% discount to UniCredit’s book value. A plan to return cash to shareholders has been derailed by the pandemic which triggered a supervisory ban on dividends.
Following fruitless attempts to strike a cross-border merger, Mustier has vowed to stay out of consolidation, even as matchmaking in Italy’s fragmented banking sector intensifies.
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 due to its robust balance sheet.
Shares in Monte dei Paschi rose 6% on Monday lifted by expectations that a potential Mustier departure would clear the path to an acquisition.
Mustier’s “no M&A” stance is out of step with growing merger activity in southern Europe following Intesa Sanpaolo’s surprise takeover of UBI this summer.
Credit Agricole last week announced a buyout offer for third-tier Italian lender Creval.
Meanwhile Banco BPM, which at the start of summer held contacts with UniCredit over a potential tie-up, has welcomed merger overtures by the top investor in BPER Banca.
($1 = 0.8351 euros)
Reporting by Valentina Za; Editing by Simon Cameron-Moore