Siena, the medieval city renowned for its Palio horse races, is home to the world’s oldest bank. Within its aging walls lies a distinctly 21st-century tale of devastation wrought by local politicians and global financiers.
Banca Monte dei Paschi di Siena SpA, Italy’s third-largest lender, is struggling to survive as it seeks to repay a second bailout or face nationalization. Its downfall proved a boon to global investment banks. They offered merger and investment advice to executives beholden to politicians that helped wipe out 93 percent of Monte Paschi’s value. Then they sold it complex derivatives that hid, even worsened the losses.
Efforts to rescue the 541-year-old lender have cost Italian taxpayers 4.1 billion euros ($5.6 billion). The investment banks, including Merrill Lynch & Co., JPMorgan Chase & Co. and Deutsche Bank AG, earned more than $200 million in fees from 2008 through 2011, filings and deal memos show.
“These international banks come to exploit, and Italy is vulnerable,” said former Senator Elio Lannutti, who heads Adusbef, a consumer group for Italian bank customers. “On one side, there’s the local incompetence, and on the other side the bad faith of the international investment banks.”
Franco Debenedetti, a former chief executive officer of Olivetti SpA, was even blunter.
“It’s the inevitable consequence of medieval governance falling prey to the fangs of Wall Street,” said Debenedetti, now chairman of Italy’s Bruno Leoni Institute, a pro-free-market research group in Turin.
Monte Paschi’s missteps began with its November 2007 agreement to buy Padua-based Banca Antonveneta SpA, according to accounts of a dozen people and more than 29,000 pages of depositions, e-mails and documents in court files. The Siena lender’s chairman at the time was Giuseppe Mussari, a political appointee with no prior bank-management experience who was in his first year on the job. Seeking to expand Monte Paschi’s reach, he offered 9 billion euros in an all-cash deal just as the global financial crisis was claiming its first victims.
The man he turned to for financial advice was Andrea Orcel, a top Merrill dealmaker. It was someone already familiar with the takeover target: Orcel was working for the other side just days earlier, earning millions of dollars advising Spain’s Banco Santander SA on its purchase of Antonveneta, the same bank Mussari now wanted to buy.
The deal was a disaster for Monte Paschi. Pressed by Santander to complete the purchase quickly, Mussari agreed to pay 2.4 billion euros more than what Orcel’s Spanish client spent -- a 36 percent profit in just four weeks for flipping the Italian lender. Mussari never examined the financial books of the company he was trying to acquire, a standard procedure known as due diligence, the documents show.
Orcel rose to global finance’s top ranks and now runs investment banking at UBS AG, Switzerland’s biggest lender. For Monte Paschi, paying that high a price in cash hampered its ability to weather losses in the global recession that followed the 2008 bankruptcy of Lehman Brothers Holdings Inc.
That’s when investment bankers stepped in again. They sold Monte Paschi derivatives contracts that ended up obscuring the bank’s mounting losses from regulators and investors. The deals further worsened the bank’s finances. In one such agreement, dubbed Project Santorini by insiders, Deutsche Bank loaned Monte Paschi about 2 billion euros in 2008, a transaction used to hide losses of 429 million euros.
Santorini came to light when Bloomberg News disclosed it in January, exposing a scandal that rocked Italy, affecting the outcome of national elections and sparking investigations. Three former Monte Paschi executives, including Mussari, went on trial last month for obstructing regulators on another derivatives deal, involving Tokyo-based Nomura Holdings Inc., in what could be the first of many cases.
It wasn’t the first time global investment banks sold opaque derivatives in Italy. From the central government in Rome to the town of Cassino, borrowers have lost billions of dollars on such bets.
In December, a judge convicted bankers at four firms, including JPMorgan and Deutsche Bank, of fraud in arranging an interest-rate swap for the city of Milan. He blamed a “grave asymmetry of information” and the failure to inform officials of “obvious” conflicts of interest. The banks sold Milan derivatives after gaining its trust as advisers, the judge said. All four firms are appealing the verdict.
The Monte Paschi deals are part of an expanding family of structured transactions that “depend on lack of transparency, high transaction costs, differences in financial sophistication and the erosion of fiduciary obligations in a world of caveat emptor,” said Ingo Walter, a finance professor at New York University’s Stern School of Business.
While both investment bankers and the executives who ran Monte Paschi are to blame, Orcel’s role working both ends of the Antonveneta deal stands out, said Salvatore Cantale, a finance professor at IMD business school in Lausanne, Switzerland.
“This is not ethically permissible,” Cantale said. “But what did Monte Paschi do to avoid that?”
Santander and Monte Paschi both knew about Merrill’s roles and had no issue with the securities firm advising the two parties, according to two people with knowledge of the deal who asked not to be identified because the talks were private. One of them said Merrill’s mandate from Santander ended on Nov. 2, 2007, when the ABN Amro bidding group announced it had acquired 98.8 percent of that bank’s voting rights.
Orcel declined, through a UBS spokesman, to comment about his role in the deal as did a spokesman for Bank of America Corp., which purchased Merrill in 2008. Fabio Pisillo, a lawyer for Mussari, said all of the allegations against his client, who declined to be interviewed, are without foundation.
Siena prosecutors have requested that New York-based JPMorgan stand trial for obstructing regulators and failing to oversee employees properly on its Monte Paschi financing, according to four people with knowledge of the investigation. JPMorgan has said it “acted correctly at all times” and would defend itself against any charges.
Prosecutors in Italy and regulators in Germany also are reviewing the Deutsche Bank derivatives after Bloomberg News reported in July that the Frankfurt-based lender kept them off its own books too, according to a person with direct knowledge of the inquiry. The bank said in a statement that the 2008 transaction “was subject to our rigorous internal approval processes and also received the requisite approvals of the client, who was independently advised.”
Nomura, which bought Lehman’s European and Asian units in 2008, is being investigated in Siena for alleged fraud and usury on a similar derivatives transaction with Monte Paschi in 2009. A spokesman for Nomura in London declined to comment.
The allegations, if proven, would be a betrayal of the heritage of a bank with 2,300 branches and 28,500 employees that traces its origins to combating excessive loan rates. Siena officials founded Monte Paschi in 1472, after the Black Death wiped out more than half the city’s population. They modeled it on the pawnshops Franciscan monks had set up to counter usury. As it grew, the lender helped fuel the Renaissance in Tuscany that pulled Europe from the Middle Ages.
Monte Paschi was nationalized in 1936 during the fascist regime of Benito Mussolini and didn’t shake free of state control until 1995. Like other Italian lenders, it was entrusted to a nonprofit foundation, which used dividends paid by the bank to make contributions to Siena hospitals and schools. The organizations were encouraged by regulators and lawmakers to dilute their stakes over time by selling shares to diversify their holdings and ensure stable endowments.
In Siena, the foundation kept its grip. Appointments and investment decisions at the bank remained under the control of Fondazione Monte dei Paschi di Siena, which owned a majority stake at the time of the Antonveneta deal. The foundation in turn was controlled by the Democratic Party, which ran the city. A spokesman for the foundation declined to comment.
Mussari, 51, a lawyer with a mop of feathered hair, grew up in Calabria and moved north to Tuscany to attend the University of Siena. He rose through positions at the Siena criminal court and was named chairman of the Monte Paschi foundation in 2001.
Managers of the foundation have traditionally rotated into top positions at Monte Paschi, and in 2006 it was Mussari’s turn. Until then, he had never held a bank job, according to a biography posted on the Italian stock exchange’s website.
The new chairman had sought to expand Monte Paschi’s reach while still at the foundation. He held weekend meetings to strategize with the bank’s executives and advisers at his home outside Siena, a Tuscan hillside villa overlooking vineyards and cypress trees, according to one person who participated in at least half a dozen such sessions.
After he joined Monte Paschi, the fifth-biggest Italian lender at the time, the board authorized him to search for acquisitions to keep up with the country’s two largest banks, UniCredit SpA and Intesa Sanpaolo SpA, which were expanding.
Politics got in the way. A proposed merger with Banco Bilbao Vizcaya Argentaria SA, Spain’s second-biggest bank, fell through when Maurizio Cenni, Siena’s mayor at the time, objected to the deal because it would weaken the foundation’s control, said a person with knowledge of the discussions. Cenni, who now works for Monte Paschi, declined to comment.
Then, in 2007, Mussari set his eyes on Antonveneta, which had about 1,000 branches, mostly in Italy’s northeast. It was owned by Dutch bank ABN Amro Holding NV, then in the process of being sold to a group of European lenders, including Royal Bank of Scotland Group Plc and Santander.
It was after the consortium of banks won control of ABN Amro in October 2007 that Mussari hired New York-based Merrill.
Orcel, who led the team of Merrill bankers that represented Santander on the $100 billion ABN Amro deal, the largest bank takeover ever, also headed the Merrill group that helped Monte Paschi raise funds to buy Antonveneta, according to three people with knowledge of the negotiations. He helped bring Santander Chairman Emilio Botin together with Mussari, the people said.
Orcel traveled to Siena and met Mussari multiple times to discuss the transaction, according to a deposition this year by Antonio Vigni, then Monte Paschi’s general manager, who said he was present at three or four such gatherings with Orcel in the chairman’s office in Siena. Vigni, who declined to comment for this story, didn’t say when the meetings occurred or what was discussed. His deposition, like others, was conducted in Italian and translated by Bloomberg News.
A graduate of the University of Rome with a square jaw, an athletic build and salt-and-pepper hair, Orcel had worked on some of Europe’s biggest banking takeovers, including Santander’s 2004 acquisition of Britain’s Abbey National Plc.
Merrill bankers didn’t provide Monte Paschi with a fairness opinion, an evaluation of the price paid in a deal, court documents show. They did assist the Italian lender in determining how much capital it needed to raise, according to a presentation prepared in November 2007 for Monte Paschi’s board contained in filings. In March 2008, Merrill helped Monte Paschi executives show the foundation how boosting capital would affect its control of the lender, court files show.
Orcel’s work for Monte Paschi didn’t stop Merrill from touting Santander’s success selling Antonveneta in its 2007 annual report. Under a photo of a smiling Orcel and his team was a description of the deal saying Santander “stands to realize a sizeable gain on the sale.”
Neither Orcel nor Bank of America has been accused of wrongdoing. Orcel, 50, wasn’t questioned as a person with direct knowledge of the Antonveneta case, according to an Italian law-enforcement official who asked not to be identified because he wasn’t authorized to discuss the investigation.
Still, Orcel is required by regulators to steer clear of significant conflicts of interest. He’s been registered since 2001 with the U.K. securities market watchdog, the Financial Conduct Authority, and its predecessor. Under the regulator’s 11 principles of conduct, firms are required to manage conflicts of interest “fairly” both between themselves and their customers, and between a customer and another client. Individuals must act with integrity and observe proper standards of market conduct.
“Many investment banks will flip sides and take advantage if there’s an opportunity to get another fee,” said Jonathan Callaway, a London-based senior adviser at Canaccord Genuity, the capital-markets unit of Canaccord Financial Inc.
Even before the agreement to buy ABN Amro was struck in October 2007 after a six-month fight, Botin was plotting his next move: What to do with its assets after he won.
Botin, who declined through a spokeswoman to comment about Monte Paschi, has banking in his blood. The patriarch of a family that has helped run Santander for 118 years, he joined the bank in 1958, became chairman in 1986 and built it through acquisitions in Brazil, the U.S. and the U.K. into one of the world’s top-20 publicly traded lenders.
Santander’s Italy country head, Ettore Gotti Tedeschi, who would later become chairman of the Vatican bank, started the process of disposing of Antonveneta by meeting with Mussari in Rome on May 30, 2007, Gotti Tedeschi told prosecutors this year.
They met again in June, this time in Siena, and seven days later Botin visited Mussari there, Gotti Tedeschi said. The session, at Mussari’s home, decorated with paintings of the Virgin Mary, lasted about 40 minutes. Botin said he was seeking a merger between Antonveneta and Monte Paschi. The proposal was blocked by the foundation, according to Gotti Tedeschi, who told prosecutors he wasn’t involved in the talks after that. He declined to comment for this story.
Mussari tried again after Botin’s group of banks won ABN Amro. Santander’s slice of the acquisition was valued at 19.9 billion euros, including 6.6 billion euros for Antonveneta.
For the subsequent resale of Antonveneta, investment bankers swapped sides. Rothschild, which had represented ABN Amro, won the job of advising Santander on the sale.
At Monte Paschi, it wasn’t always clear who was advising whom, court documents show. In one instance, the CEO of Rothschild’s Italian unit, Alessandro Daffina, assisted Monte Paschi’s chairman by drafting a letter, in Italian, for him to send to Santander’s Botin to open takeover talks.
Daffina made sure the letter he’d written got to his client. “It’s best to send it by courier in a discreet and confidential double envelope,” the Rothschild banker advised Mussari in an e-mail containing a draft of the letter.
Mussari later said, in a 2013 deposition, that he believed Daffina was “the author of our proposal’s financial terms.”
“Did you have an adviser?” Mussari was asked by prosecutors during his deposition.
“No!” Mussari replied. “Given the input of Rothschild we decided, until we’d concluded a more binding deal, to not have an adviser, to avoid leaks.”
Daffina declined to comment for this article. Rothschild said in an e-mail that it didn’t advise any potential acquirers of Antonveneta.
“Our only role in this transaction was to provide independent advice to Santander in relation to the sale and included approaching a number of potential purchasers for expressions of interest,” Rothschild said.
Mussari would hire Orcel’s firm the evening before the contract was signed. Until then, according to Mussari’s account, he acted largely on his own. In just one week, he put in motion the deal that now threatens the bank’s five-century legacy.
While Mussari says others weren’t involved, he consulted with the foundation’s two leaders on Nov. 2, 2007, according to the deposition of Gabriello Mancini, the group’s president at the time. They met at its headquarters in the baroque Palazzo Sansedoni overlooking Siena’s main square, where the Palio horse race is staged. Mancini declined to comment.
The foundation gave Mussari permission to proceed. He pushed ahead, even as at least one Monte Paschi executive questioned the plan and whether Mussari had a clear grasp of fundamental banking concepts, a court deposition shows.
A few days before the deal was announced on Nov. 8, 2007, then-Chief Financial Officer Daniele Pirondini was summoned to Mussari’s office, a three-room suite with exposed medieval brickwork and tapestries at the bank’s Siena headquarters, which includes the 13th century Palazzo Salimbeni.
“Do we have 9 billion euros?” Mussari asked, according to Pirondini’s February 2013 deposition.
“I couldn’t tell if it was a joke,” Pirondini told prosecutors.
Mussari pressed for an answer.
“It depends,” Pirondini told his boss, according to his account. “If it’s 9 billion euros of liquidity,” he said, “it shouldn’t be a problem to get it.”
“On the other hand, if it’s an issue of capital, objectively, we have a problem,” Pirondini said.
The CFO then pointed out the difference between liquidity, the amount of cash or cash-like assets on hand, and capital, which is the firm’s shareholder equity. To buy Antonveneta, the bank would need to replenish its capital by raising new money from investors.
“I try to explain, to make him understand the difference,” Pirondini testified.
He said he met with Mussari again, the next day, to give him an estimate of how much capital they’d need to raise.
“We’ll take a more in-depth look at it,” Mussari said, according to Pirondini.
From that moment until the deal went public, nobody asked him to take a closer look at the funding needs and no meetings were held about the matter inside the bank, Pirondini said.
On Nov. 7, 2007, Botin sealed the deal on his terms in a phone call with Mussari.
“‘If you want to buy Antonveneta, I want 9 billion euros, period,’” Botin said, according to Mussari’s 2013 deposition. “Botin wanted 9 billion, not 8 billion 999 million 999 euros point 99.”
Botin confirmed that account in his deposition, saying he told Mussari he had 48 hours to agree. While Mussari tried to get a lower price, Botin said he held firm, knowing “the enormous interest the buyer had.”
He also argued that Monte Paschi shouldn’t examine Antonveneta’s finances, according to Mussari.
“Botin was against due diligence, and he justified it in a logical manner,” Mussari testified, saying Botin told him, “‘I bought an asset on the market and have never managed it. I’ll sell it to you like I bought it.’”
The agreement didn’t contain a safeguard clause to alter the price if conditions changed, Mussari said. It lacked clauses that international contracts normally have for deals of this kind, Angelo Benessia, an outside lawyer for Monte Paschi who had taken the lead handling the deal, said in a deposition given to Italy’s finance police in July 2012.
As the deal progressed, “I had the impression that the disparity in their contractual negotiating powers hadn’t changed since the opening salvos,” Benessia said. Benessia, reached on his mobile phone, declined to comment.
It was a terrible time to be locked into a deal. When the Antonveneta purchase was announced on Nov. 8, 2007, Italian stocks were down 13 percent from their May peak and a credit-market squeeze had triggered the collapse of U.K. mortgage lender Northern Rock Plc.
While Mussari said he didn’t hire a financial adviser to avoid leaks, the talks weren’t a secret, even outside Monte Paschi’s inner circle. Investment banks were competing to secure a slice of the business before the deal was made public.
Enrico Maria Bombieri, then JPMorgan’s head of investment banking for Europe, the Middle East and Africa, e-mailed Mussari from Lisbon at 9:51 a.m. on Nov. 8, a few hours before the deal was announced, according to a March 2013 deposition.
“I hear there’s important news in sight,” he wrote in Italian on his BlackBerry. “You are an evil genius!”
“I hope you will want us at your side,” Bombieri wrote, without mentioning Antonveneta or Santander. He signed off with “un abbraccio” -- a hug.
The two men later spoke.
“Have you seen this beautiful deal?” Mussari asked, according to Bombieri’s deposition.
Bombieri would soon learn that Merrill had won the lead-adviser role. Mussari’s pre-announcement communications about the transaction are part of a probe in Siena of alleged abuse of privileged information, court documents show. Bombieri, who declined to comment for this story when reached on his mobile phone, isn’t a target.
At 11:15 a.m. on Nov. 8, Monte Paschi’s board began the meeting at which Mussari presented the deal, according to the board’s minutes. He won unanimous approval by 1:35 p.m. Botin sent back the signed contracts about an hour later.
When the press releases went out that afternoon, they said that Merrill, along with Milan-based Mediobanca SpA, would be Monte Paschi’s advisers and that Merrill would also arrange funding. A spokesman for Mediobanca declined to comment.
The foundation later brought in JPMorgan as an adviser, and the U.S. bank also helped arrange a securities sale for the Siena lender, the offering for which it is being investigated.
On the day the deal was announced, Merrill analysts questioned Monte Paschi executives about whether the price was too high.
“Did you have competitors in your pricing?” Merrill’s Antonio Guglielmi asked on a conference call. “Did you negotiate? Did you actually mean to pay this bank so dear?”
The executives defended the price. They didn’t say anything about negotiations.
Botin took a victory lap. He wrote an open letter to shareholders that day saying the 9 billion-euro price tag was “significantly higher than the 6.6 billion euros that we had valued the Antonveneta group at in the takeover of ABN Amro.”
As a consequence, Botin called off a 4 billion-euro capital increase that Santander had planned to finance the ABN Amro purchase, he wrote. He didn’t need the money anymore.
Four days later, the Merrill analysts cut their rating on Monte Paschi’s stock to “Sell” from “Neutral.”
“We find it hard to justify the price paid,” Guglielmi and a colleague, Andrea Filtri, wrote in a Nov. 12, 2007, note.
Over the six months it took for the sale to close, the global financial crisis deepened and bank stocks plummeted. On April 25, 2008, ABN Amro’s shares were delisted in the Netherlands and New York. A month later, on May 30, Monte Paschi closed its deal.
Santander wasn’t the only winner. Orcel was paid about $36 million in 2007, including a $12 million bonus for advising the buyers of ABN Amro, the Wall Street Journal reported in March 2009. Orcel made $33.8 million for his work at Merrill in 2008, before the bank was sold that December to Bank of America, the Journal reported. Merrill didn’t disclose what Orcel was paid.
The fortunes of Monte Paschi worsened after the Lehman bankruptcy. The 6 billion euros of securities Merrill advised the bank sell to existing investors to fund the Antonveneta purchase left the lender short of capital when losses mounted.
Facing 2008 trading losses of about 400 million euros on an earlier deal with Deutsche Bank and as profit plummeted, Monte Paschi hid the losses by entering into new derivatives contracts with Germany’s largest lender. It hired Nomura in 2009 to restructure an investment, which masked an additional 300 million euros of losses.
Monte Paschi’s derivatives backfired because they included money-losing bets on Italian government bonds. In all, the bank has piled up losses of 8.4 billion euros in the past two years.
Mussari, who left Monte Paschi in April 2012, was forced out as head of Italy’s banking association five days after Bloomberg News’s account of the derivatives deals prompted the company to say it would restate its accounts. The former chairman and two other executives went on trial last month for allegedly obstructing regulators by hiding a document related to the Nomura deal. No testimony has been offered yet, and a verdict could be months away.
Prosecutors also are seeking charges against Mussari and other former Monte Paschi managers for obstructing regulators, market manipulation and falsifying filings related to funding the Antonveneta purchase.
The revelations about Monte Paschi’s secret derivatives deals dominated the front pages of Italy’s newspapers in February as voters prepared to elect their next leader. The Democratic Party saw its lead eroded because of its ties to the bank, according to SWG Institute, a polling company. Mussari had been the single biggest contributor to the party’s local branch, giving 284,000 euros in the three years through 2011, according to the Democratic Party’s website.
Former Prime Minister Silvio Berlusconi seized on the fact that a bank controlled by the Democratic Party had gotten a bailout that, at 4.1 billion euros, was exactly the amount Italian homeowners had paid in new property taxes. Berlusconi’s assertion that the tax had gone from citizens’ pockets into the bank’s vaults boosted the appeal of Italy’s Five Star Movement, the party of comedian-turned-politician Beppe Grillo.
The result was an election outcome without a clear winner. Eight months later, Monte Paschi faces nationalization if the Italian government converts its bailout funds into stock in the bank, one possible outcome if the bank’s new management can’t raise enough fresh capital to satisfy European regulators. In Rome, a frail coalition government teeters.
Conspiracy theories surfaced about what really drove the Antonveneta deal. In February, a confidential informant told the finance police in Rome that as part of Monte Paschi’s purchase, bribes had been paid through accounts held at the Vatican bank and in San Marino, a police filing shows. He provided a list of the alleged accounts. Prosecutors in Siena told reporters in July that they didn’t find any evidence of bribery.
The death of David Rossi, Monte Paschi’s communications chief, further fueled speculation. At about 9 p.m. on March 6, a bank employee noticed that Rossi, a long-time aide to Mussari, was missing from his fourth-floor office. A window had been left open. The employee notified authorities, who found Rossi’s body in a courtyard below. Rossi, 51, whose home had been searched by police two weeks earlier, wasn’t the subject of inquiries. His death was ruled a suicide.
The Antonveneta deal is still having repercussions. As part of a restructuring agreement with the European Union, there will be job cuts, branch closings and losses for bondholders.
Monte Paschi, under its new chairman, Alessandro Profumo, and CEO Fabrizio Viola, was fined 300,000 euros this month by Italy’s securities-market regulator for inadequate disclosure.
Meanwhile, Monte Paschi has sued Nomura and Deutsche Bank in a Florence court seeking 1.2 billion euros in damages.
“Clearly, many investment banks made a lot of money on Monte dei Paschi,” the New York Times cited Profumo as saying in February. “I would say too much money.”
A spokesman for the bank declined to comment and said Profumo didn’t want to be interviewed for this story. Deutsche Bank has said the claims “are without merit.”
The Bank of Italy, which said in January that it had known for more than two years that Monte Paschi had accounting irregularities, defended its oversight in a nine-page document published in May. The central bank said its vigilance allowed the regulator to put an end to high-risk and “unusual” dealings and to boost Monte Paschi’s internal controls.
The foundation, which used derivatives to help finance the Antonveneta purchase, had to curtail charitable contributions when the bank eliminated its dividend. That meant it couldn’t pay for the colorful costumes worn by Palio riders. The foundation’s stake in Monte Paschi has been reduced to 34 percent and may decline further if it’s forced to turn over shares to investment banks. The foundation pledged its Monte Paschi stock as collateral on about 350 million euros of derivatives deals, according to two people with direct knowledge of the agreements.
The lesson for the world’s oldest bank -- if it survives to learn from its mistakes -- is clear, according to Robert Daines, a former Goldman Sachs Group Inc. investment banker and professor of law and business at Stanford University.
“Investment banks occupy a unique position sitting at the hub of information and capital,” Daines said. “The risk is that they use the information for their own benefit and not for the client.”
Orcel continued to advise Santander and in September 2009 became chairman of global banking and markets at Charlotte, North Carolina-based Bank of America.
He jumped to UBS in July 2012 as co-head of its investment bank before taking over as the unit’s sole chief in November. His pay for joining the Zurich-based lender that year -- 24.9 million Swiss francs ($27.6 million) in cash and stock -- dwarfed that of his boss, CEO Sergio Ermotti, who made 8.9 million francs. Orcel’s 2012 compensation replaced what he forfeited when he left Bank of America, UBS said.
Now, after profiting from the deal that almost led Monte Paschi to ruin, Orcel stands to make money rescuing it. On Oct. 7, the bank announced plans for a capital increase that will help it repay 3 billion euros of government funds next year. The adviser on the offering: UBS.