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UniCredit Said to Favor Internal Pick as CEO at Board Tomorrow

UniCredit SpA’s board may choose an internal candidate to replace Alessandro Profumo as chief executive officer, and create a general manager role to share duties, two people with knowledge of the matter said.

Roberto Nicastro and Federico Ghizzoni, two of the bank’s four deputy CEOs, are the leading candidates for the CEO job, said the people, who spoke on condition of anonymity because the selection process is private. Deputy CEO Paolo Fiorentino is also in the running for the top positions, the people said. A decision may be made at tomorrow’s board meeting in Warsaw.

Chairman Dieter Rampl, 63, is under pressure by Italy’s central bank to find a new CEO quickly and avoid a leadership vacuum. Choosing a successor from inside the Milan-based bank may assuage banking foundations, among the company’s largest investors, which also want a general manager who would focus on local issues, the people said. The new structure would bring UniCredit in line with Italy’s No. 2 and No. 3 banks.

“We see an internal appointment positively because UniCredit is a complex machine,” said Angelo Manca, a fund manager at Ockham Capital Partners in London who doesn’t hold the bank’s shares. “A hands-on internal candidate with support from the bank looks like the best choice.”

A UniCredit official declined to comment on the possible appointments.

‘Profumo Boys’

Nicastro and Ghizzoni, and the two other deputy CEOs, Fiorentino and Sergio Ermotti, have been dubbed “Profumo’s boys” by the Italian media because the former CEO promoted them through the management ranks.

Nicastro, 45, who’s considered the top CEO candidate, according to the people, is a former McKinsey & Co. consultant, like Profumo, and joined Credito Italiano as head of planning in 1997. In August 2003, he was appointed head of the bank’s retail division and became one of the deputy CEOs in 2007.

Ghizzoni, 54, started his career at the bank in 1980 as a customer relations manager for a branch in the northern city of Piacenza. Over the next three decades, he ran UniCredit’s foreign businesses from London to Istanbul, became head of its Central Eastern Europe division in 2009 and was named a deputy CEO last month.

Creating the general manager’s position would be part of a corporate governance revamp and reduce the powers of the CEO. Dino De Poli, the chairman of Fondazione Cassamarca, which owns a 0.8 percent stake in UniCredit, supports the new position and favors an internal candidate because he would have greater knowledge of the bank.

‘Negative’ for Bank

“The creation of a general manager position is a maneuver by Italian banking foundations,” said Gianmaria Bergantino, who helps manage 200 million euros at Bank Insinger de Beaufort in Rome and doesn’t own UniCredit shares. “I would view the new position as negative for the bank because it could slow down board decisions.”

Intesa SanPaolo SpA, Italy’s second-biggest bank, and Monte dei Paschi di Siena SpA, the third-largest, already have general managers, who focus on daily operations.

Relations between Profumo and some of the foundations, which own more than 11 percent of the bank, soured in the last two years after he went to investors twice to boost capital. The tension increased after Libyan investors raised their holdings, ultimately forcing Profumo to quit at a Sept. 21 board meeting.

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