Daily Management Review

UniCredit CEO’s Uncertain Future Puts Governance Talks On Hold


Mustier puts forth “strict conditions” about any “potential deal”.

Informal discussion regarding governance at UniCredit have been put on hold since it is not clear of the bank’s C.E.O “will stay”. The mandate of Jean Pierre Mustier is coming up in spring for renewal while sources familiar to the matter informed about “a growing rift with the board” regarding strategy, whereby making his future with the bank uncertain.
However, UniCredit did not comment on the same. According to sources familiar with the matter, the conflict stemmed from “potential bid for bailed-out Monte dei Paschi di Siena and a plan to split UniCredit’s domestic and foreign assets”. On one side, there have been reports of the bank’s board looking into Mustier’s conditions for remaining in the only bank of “global systemically important” in Italy for the coming three years.
However, one source informed that the directors will hold “an informal discussion” prior to the board renewing process scheduled to commence next week. The bank had earlier informed that Pier Carlo Padoan, ex- economy minister of Italy will be considered for the chairman candidate. Furthermore, Mustier had also “turned down the top job at HSBC” earlier this year.
Mustier’s efforts to establish “cross-border tie-up” couldn’t succeed due to political reasons, yet he “ruled out mergers and acquisitions” amid the sweeping consolidation surge seen within “fragmented banking sector” of Italy. According to Reuters:
“Although Intesa’s surprise takeover of rival UBI this year to create Italy’s no.1 bank has piled pressure on Mustier, sources say he is resisting government requests to take on ailing Monte dei Paschi, which the Treasury is working to re-privatise to meet commitments taken with Brussels”.
Furthermore, sources have informed about Mustier’s “strict conditions” about any “potential deal” while the Treasury looks into incentives like “tax benefits” whereby significantly boosting capital for any buyer of “Monte dei Paschi”. Mustier has set forth to reduce “UniCredit’s exposure to debt-laden Italy”. However, his proposal of foreign assets’ spin off has faced resistance and has been kept on hold.
Reuters reported:
“UniCredit will update its business plan in the second quarter, and is working with JPMorgan and Goldman Sachs on strategy”.