UniCredit to sell FinecoBank stake; Pioneer talks continue

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In a statement, UniCredit said it would sell a stake of up to 10% in FinecoBank’s existing shares to certain institutional investors via an accelerated bookbuilding process. The placement will start “immediately.” UniCredit, Italy’s largest bank by assets, said it currently holds about 65% of FinecoBank and aims to maintain a majority stake.

UniCredit’s future CEO Jean-Pierre Mustier told reporters on July 11 that the FinecoBank stake sale will add between 7 and 8 basis points of capital. At Monday’s closing prices a 10% stake in FinecoBank is worth roughly €345 million.

At the end of June the bank appointed ustier, who had been in the recent past the bank’s investment banking chief, as CEO, more than a month after former CEO Federico Ghizzoni agreed to step down.

The decision put an end to more than a month of bickering among board members as to who was the best candidate to replace Ghizzoni and steer the company to drastic actions to strengthen the bank either via a capital increase or asset sales, or both. Investors have been dumping the stock for more than a year, fretting about the financial solidity and profitability of the lender for months. Shares are trading at record low levels and have dropped more than 60% since the beginning of the year, making UniCredit one of the worst performers of the sector.

UniCredit also said the board of directors approved the launch of an in-depth review of the bank’s strategy under Mustier to reinforce and optimise its capital position. The review will encompass all major areas of the bank and will focus on capital optimisation, cost reduction, cross selling and improved risk discipline, the bank said.

Mustier also said the bank was working with its partners to try to find a solution about a merger deal of its fund management business Pioneer and Banco Santander’s asset management unit. UniCredit and Santander reached a preliminary agreement on the merger in April last year.

Mustier’s comments came in response to a report by the Financial Times, which said the two banks were set to abandon the deal over concerns about the uncertainty following the UK’s vote to leave the European Union.

“We await a number of regulatory responses for this transaction,” a Santander spokesman said.

Write to Giovanni Legorano at giovanni.legorano@wsj.com

Jeannette Neumann contributed to this article, which was published by The Wall Street Journal

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