UniCredit CEO Dismisses Questions About His Future
May 23 2016 - 11:30AM
Dow Jones News
MADRID—UniCredit SpA Chief Executive Federico Ghizzoni, facing
pressure from board members and shareholders over his leadership
performance, brushed aside questions about his future as he
launched the Italian bank's expansion into Spain.
"We don't have any tensions inside the group," Mr. Ghizzoni said
at a news conference on Monday. "There is nothing dramatic going
on." His relationship with the board, he added, "is very
transparent, very simple, straightforward."
The board of UniCredit, Italy's largest bank, has scheduled a
meeting on Tuesday, a person close to the bank said. People close
to the board said on Friday that shareholders and board members
were seeking a new CEO for the lender, which suffers from low
profitability, a high percentage of bad loans and a sprawling
international network that has failed to live up to
expectations.
Mr. Ghizzoni, who has been at the helm since 2010, could step
down as early as this week, the people said.
Mr. Ghizzoni said he had no confirmation of a board meeting.
Asked whether he would resign, Mr. Ghizzoni told journalists, "I am
not here to make comments about this subject, but to speak about
the opening of the branch."
"We will see in the future, but as far as I am concerned, as you
see today, I am Spain," Mr. Ghizzoni added. "So for me is it is
business as usual."
However, the bank's expansion into Spain, to open a corporate
and investment banking unit, is unusual because it bucks a trend of
retrenchment among Europe's major banks.
The unit, which began operating in February, was formally
inaugurated on Monday. UniCredit executives said it would target
around 60 clients in Spain, including large companies, financial
institutions and private-equity firms, when they do business in
UniCredit's main markets—Germany, Italy, Austria, and Central and
Eastern Europe.
Most of Europe's banks are focused on cutting costs to bolster
profitability, which has been eroded as interest rates have fallen
below zero. Investors say they generally prefer banks that are
streamlining, rather than bulking up.
"We know that in Europe it's not an easy moment," Mr. Ghizzoni
said. "But nevertheless we see the business case to start this
operation in Spain." Spain's economy is expanding faster than other
major European countries, he said.
Spanish bankers say they are surprised that UniCredit has chosen
to launch a unit in Spain. The country's dominant lenders in
corporate and investment banking have seen volumes and fees decline
this year as global markets drag.
Spain's own set of problems have exacerbated those global woes.
A rerun of December's parliamentary election has been set for June
after political party leaders failed to cobble together a governing
coalition. The political and economic uncertainty has discouraged
new investment, hurting corporate and investment banking business
in Spain.
"Good luck," said one Madrid-based banker when told that
UniCredit was launching a new unit in Spain.
Still, some Spanish bankers acknowledge that UniCredit has an
advantage over Spain's lenders, which don't have a strong presence
in Central and Eastern Europe. If Spanish companies pick up the
pace of investments in that region, the bankers said, UniCredit
could be well positioned to cater to them.
Write to Giovanni Legorano at giovanni.legorano@wsj.com
(END) Dow Jones Newswires
May 23, 2016 11:15 ET (15:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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