UniCredit CEO Says `Intensively' Working on Fund Solution

  • Ghizzoni says UniCredit pushing ahead with Pop. Vicenza IPO
  • CEO says UniCredit would be among investors in possible fund

Italian financial institutions are “intensively” working on a solution that would see private investors participate in a fund aimed at supporting the recapitalization of troubled lenders, UniCredit SpA Chief Executive Officer Federico Ghizzoni said. The shares jumped.

“A number of privately-held institutions are discussing a solution that should address capital and bad loan issues,” Ghizzoni, who runs Italy’s biggest lender, said at a press conference in Milan late Thursday. “We would consider this as a positive solution if all of the Italian banking system will benefit.”

Federico Ghizzoni

Photographer: Martin Leissl/Bloomberg

Italian Treasury and central bank officials are in talks with investors, banking industry representatives and state lender Cassa Depositi e Prestiti about the creation of a 3 billion-euro ($3.4 billion) fund that would buy shares in bank recapitalizations, people familiar with the matter have said. With the country’s lenders facing an estimated 360 billion euros of soured loans, the European Central Bank has stepped up pressure on banks to clean up balance sheets.

“The setup of funds supporting the disposals of non-performing loans by Italian banks and the capital increases would be positive for the sector, provided that the ECB and the European Commission give the green light,” Manuela Meroni, an analyst at Banca IMI SpA, wrote in a note to clients on Friday. She has a hold recommendation on UniCredit shares.

UniCredit shares increased 7.3 percent to 3 euros at 11:23 a.m. in Milan after declining 5.9 percent on Thursday. That pared losses this year to about 40 percent. The Bloomberg Europe Banks and Financial Services Index is down 25 percent. Banco Popolare SC, Unione di Banche Italiane SpA and UniCredit are the three worst performers on the benchmark.

Ghizzoni said that “it’s clear” that UniCredit would be an investor in the new fund, without elaborating on the process or technicalities of such a plan. The vehicle would be financed by foundations, pension funds and other private firms, while CDP may have a role as an investor or backer, according to the people.

IPO Plans

Ghizzoni said UniCredit is pushing ahead with the initial public offering of Banca Popolare di Vicenza SCpA that it’s running. The lender, which is guaranteeing 1.5 billion euros of the 1.8 billion-euro IPO, had planned to start gathering orders on April 19 and the shares would begin trading on May 3, people with knowledge of the plan said earlier.

The CEO said he’s confident about the outcome of the Vicenza IPO, which would allow investors the chance to make “relevant upside” buying shares of the cooperative bank.

Fortress Investment Group, the New York-based private-equity firm, may buy Popolare Vicenza shares in the IPO and might buy some of the bank’s bad loans, Il Messaggero reported Thursday, without citing anyone. Veneto Banca SCpA, another Italian cooperative lender, is also planning a listing.

Before it's here, it's on the Bloomberg Terminal.