UniCredit shares rise 9% after new chief strikes €328m deal

UniCredit rose after the Italian lender reaped €328 million by selling a stake in online bank FinecoBank, a move welcomed by investors anticipating more measures by incoming chief executive Jean Pierre Mustier to bolster capital strength.

The shares rose almost 9 per cent, touching the highest level since July 1st and reducing this year’s slide to 61 per cent. Mr Mustier, a 28-year veteran of the European securities industry who once ran UniCredit’s investment bank, was appointed earlier this month, replacing Federico Ghizzoni. Though it only improves UniCredit’s capital position by less than 0.1 percentage point, the Fineco stake sale is evidence of the new chief executive’s “pro-activeness in improving capital from day one of rejoining the group,” according to JPMorgan Chase analysts. With the sale of a 10 per cent stake in FinecoBank, UniCredit cut its holding to about 55 per cent of the online lender.

UniCredit said yesterday that “any incremental value-creating opportunities, potentially also via disposals, will be evaluated” as it applies “disciplined capital management” to all of its assets.

Santander merger

Mr Mustier also told reporters Monday that the Italian lender was working with Banco Santander to “find a solution” regarding the banks’ plan, first announced more than a year ago, to merge UniCredit’s Pioneer Global Asset Management and Santander Asset Management.

The Financial Times had reported the deal was set to collapse due to Brexit-related uncertainty. UniCredit’s statement suggests the bank’s operations in Austria and Poland, as well as Fineco and Pioneer, “are less strategic in the medium to long term,” the JPMorgan analysts said.

“We still view a large capital raise as likely by year-end or early next year.”

– (Bloomberg)