Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

UniCredit Chief Profumo Resigns After Losing Board’s Support

UniCredit SpA Chief Executive Officer Alessandro Profumo resigned, ending his 13-year tenure as head of Italy’s largest bank, after he clashed with shareholders over Libyan investments in the company.

UniCredit’s board requested Profumo’s resignation, his wife Sabina Ratti told reporters outside the offices of the Milan law firm representing Profumo late yesterday. Directors appointed Chairman Dieter Rampl, 63, to run the bank on an interim basis, news agency Ansa reported.

UniCredit will release a statement today, a bank official said. Profumo and the board reached an agreement on his severance payment, Ratti said. The settlement amount is in line with figures reported by Italian newspapers, she said. Turin daily La Stampa said Profumo rejected an exit payment of about 35 million euros.

Some of UniCredit’s largest shareholders asked Profumo to resign after he failed to tell them of the intention of Libyan investors to raise their stakes, people with knowledge of the discussions said Sept. 20. The Libyan Investment Authority, a sovereign wealth fund, recently increased its holding in the Milan-based bank by 0.5 percent to 2.6 percent, while the Central Bank of Libya holds almost 5 percent.

Profumo’s departure will mean a “hole in the leadership and strategic uncertainty, with the risk of more political influence in business decisions,” Anna Maria Benassi, an analyst at Banca Leonardo, wrote in a note yesterday.

UniCredit fell 41 cents, or 2.1 percent, to 1.90 euros in Milan trading, bringing the decline this year to 15 percent and valuing the company at 36.7 billion euros ($48.2 billion). Intesa Sanpaolo SpA, Italy’s second-largest bank, declined 22 percent this year.

International Purchases

Profumo, 53, a former McKinsey & Co. consultant, used the opening of the European markets brought about by the euro to expand outside of Italy. UniCredit spent about $60 billion on European takeovers from 2005 to 2008 to become the sixth-largest bank in the 16 nations sharing the euro with 954.6 billion euros of assets at the end of June.

Purchases included Munich-based HVB Group AG, Germany’s third-biggest bank. UniCredit also owns the largest lenders in Poland, which is vying to join the euro, and Austria, and operates in 22 countries. The bank also purchased Rome-based Capitalia SpA in 2007, just before the start of the credit crisis.

Rising loan losses in Germany and eastern Europe ate into the bank’s reserves when the financial crisis hit, forcing Profumo to announce a 6.6 billion-euro capital increase in October 2008, four days after denying the need for more funds. At the time, he admitted the mistakes of underestimating the length and depth of the crisis and making acquisitions at the top of the market.

Profumo tapped investors for funds in January of this year, when the bank raised 4 billion euros in a rights offer.

Shares Tumble

The shares, which more than quadrupled during Profumo’s first two years on the job, have dropped 70 percent from their peak in April 2007. That compares with a 30 percent decline from the pre-crisis high at Banco Santander SA, Spain’s largest bank, which has also pursued an international expansion.

Investor pressure in March forced Profumo to delay the approval of a reorganization plan, and tensions flared again over Libya. He should have informed other shareholders about the intention of the Libyan investors to raise their stakes, said Flavio Tosi, the mayor of the city of Verona, the biggest shareholder of Fondazione Cariverona, UniCredit’s fourth-largest investor.

UniCredit should pay less attention to fostering international ties and more on its home market, especially northern Italy, Tosi said. He is a member of the Northern League, the party in the governing coalition of Prime Minister Silvio Berlusconi that has criticized the Libya investments.

Italy’s banking foundations are non-profit entities created in 1990, when the government started privatizing lenders. The foundations were formed to separate the savings banks’ philanthropic work from the lenders, which became corporations. They retain stakes in Italy’s biggest banks, including UniCredit and Milan-based Intesa Sanpaolo SpA, investments that fund their philanthropic expenditures.

Balancing Needs

Born in Genoa to a Sicilian family, Profumo graduated from Milan’s Bocconi University, then spent 10 years at Como, Italy-based Banco Lariano. In 1987, he joined McKinsey’s Milan office as a consultant to financial companies. He then joined Bain Cuneo, another consulting firm, in Milan in 1989.

He became CEO of Credito Italiano in 1997, and transformed the lender into UniCredit, a bank with operations stretching from the U.S. to Kazakhstan.

Balancing the needs of local and international investors will be a challenge for whoever succeeds Profumo, analysts said. The new manager will also have to decide on the future of UniCredit’s Pioneer Global Asset Management unit, after Profumo began reviewing options for the division, including a possible sale.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.