Unicredit

Background information

Unicredit is the first Italian bank by assets. And the most European one. The group roots go back to the Thirties of last century as a state owned bank called Credito Italiano when Mussolini created the Industrial Reconstruction Institute (IRI) with the mission of revamping the economy. UNICREDIT-TOWER-1_B-796x1200It was also the first Italian bank to be privatized in 1993 as part of a major bank reform carried out by then PMs Amato and Ciampi. It becomes Unicredito in 1998 after the takeover by Credito Italiano of Banco Romagnolo and several other regional banks including Cariverona, Cassa di risparmio di Torino and Cassamarca. At the turn of the 21st century Unicredit began growing abroad, across the freshly liberalized Eastern Europe, where it bought Bank Pekao in Poland, Splitska Banka in Croatia,
Pol’nobanka in Slovakia and Bulbank in Bulgaria. In 2005 the big-bang: first the merge with HVB of Germany and Bank Austria-CreditAnstalt and, just two years later, the merge with Capitalia, a Rome bank resulted itself from the merger of several banks of the capital, with the creation of the first Italian bank and of the most European one too.
Between 1997 and 1998 the value of the share grows threefold, mainly due to the mergers. UniCredit becomes a “national brand” and is the leader of the consolidation process ended up with the takeover of Capitalia. The man who led Unicredit in the acquisition path was Alessandro Profumo, now chairman at disgraced Monte dei Paschi were he is attempting a desperate rescue mission, nicknamed the European Banker by financial reporters during the golden years. Profumo is a McKinsey trained banker firmly convinced that management is king and shareholders has to follow. And they followed this modern banking Napoleon as he raided Germany, Germania, Austria, Poland, Czech Republic. Then the crisis arrived and the effort done to create a major European banking group becomes “lead in the wings”: shortly after the crash of Lehman in 2008 Unicredit shares start to be battered in the stockmarket as it was the sole Italian bank pretty much exposed abroad. During 2009 Unicredit loses some 80 per cent of its market value. Three consecutive capital increases are not enough to halt the slide. But the storm which will oust Profumo late in 2010 doesn’t come from the financial markets. The first clouds arrived when Profumo announced his “One4c” project, aimed at putting seven banks under a single holding company, a disturbing plan for shareholder Foundations who saw it as a threat to their links with their “territories”. But the real storm arrives on September 21st: Profumo is forced to resign after the majority of board directors voted against him after he failed to inform the board that the Libyan sovereign fund Lia had become the first single shareholder with a 7,58% of the equity capital. The Financial Times in an obituary-like news article stated that: «Mr Profumo’s legacy could have been that he transformed Italian banking. Instead, it will be that he failed to build a more durable edifice”. Since autumn 2010 Unicredit is led by Federico Ghizzoni, former boss of the group East European business.

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