UniCredit CEO Said Set to Resign as Soon as Tomorrowby and
Board said to hold meeting Tuesday, may begin search
Investors seeking new management amid rising need for capital
UniCredit SpA Chief Executive Officer Federico Ghizzoni may resign as soon as Tuesday amid investor demands for a change in management, people with knowledge of the situation said.
The bank’s board will meet tomorrow and may authorize its nomination committee to begin the search for a new CEO, said one person, asking not to be identified because the discussions are private.
When asked Monday about his possible departure, Ghizzoni said that he has reserved Tuesday for a board meeting that has yet to be confirmed. “Today is business as usual,” he said during a press conference in Madrid where the bank is opening an office.
After more than five years at the top, Ghizzoni has fallen out of favor with some investors over the bank’s failure to shore up capital and increase profitability. Despite his efforts to sell assets and eliminate thousands of jobs, UniCredit remains among Europe’s least capitalized lenders. The bank’s decision to underwrite a share sale for Banca Popolare di Vicenza SpA also cost him credibility over the handling of the initial public offering, a deal that was salvaged by a government-orchestrated rescue fund.
"The relationship with the board is very transparent, very simple, straightforward, we continue to work together," Ghizzoni said in Madrid. "There is nothing dramatic going inside the group, and the situation is definitely under control."
Possible successors include Marco Morelli, head of Bank of America Corp.’s Italian operations and former chief financial officer of Banca Monte dei Paschi di Siena SpA, according to Italian media reports. Lucrezia Reichlin, a member of the UniCredit board and the European Central Bank’s former head of research, could be named chairwoman, replacing Giuseppe Vita, newspapers have reported.
Investors were displeased when the CEO in November revised a business plan that was only a year old, lowering the bank’s annual profit target for 2018 to 5.3 billion euros ($5.9 billion) from 6.6 billion euros. The bank’s common equity Tier 1 ratio, a measure of financial strength, fell to 10.5 percent at the end of March from 10.7 percent three months earlier.
UniCredit’s shares have declined 76 percent since Ghizzoni took over in September 2010, including a 41 percent drop this year. The stock was down 1.6 percent to 2.95 euros as of 1:50 p.m. in Milan, giving the bank a market value of about 18.3 billion euros.