UniCredit Plans to Raise Up to $14 Billion, Repubblica Saysby
CEO Jean Pierre Mustier looking to shore up bank’s finances
Capital increase part of a plan to be presented in December
UniCredit SpA plans to raise as much as 13 billion euros ($14 billion) through a share sale as part of Chief Executive Officer Jean Pierre Mustier’s push to shore up finances, Italy’s La Repubblica reported.
The increase is part of a plan that will be presented on Dec. 13, the newspaper reported on Friday, without saying where it obtained the information. Italy’s largest lender is seeking to raise up to 13 billion euros to avoid being forced into fire sales and as the European Central Bank toughens capital requirements, La Repubblica said. A spokesman at UniCredit declined to comment.
Mustier, who took over earlier this year, is seeking to build up capital and meet tougher regulatory requirements, a task compounded by the bank’s complex structure spread across 17 countries. The lender earlier this week raised 552 million euros by selling a 20 percent stake in online lender FinecoBank SpA, with the CEO considering further disposals as well as a sale of the lender’s bad-loan portfolio, people familiar with the matter have said.
“It seems that the street appetite is there to accept a larger rather than a smaller capital hike,” Fabrizio Bernardi, an analyst at Fidentiis with a hold recommendation on the shares, wrote in a note on Friday. “A larger capital base would therefore allow UniCredit to easily face new stringent requests” by the European Central Bank.
The stake sale will boost UniCredit’s common equity Tier 1 ratio, a measure of financial strength, by about 12 basis points. The lender in July sold 10 percent in FinecoBank for about 328 million euros.
Mustier is also pursuing a sale of UniCredit’s Pioneer Global Asset Management SpA unit after abandoning talks with Banco Santander SA earlier this year to combine asset-management arms. Amundi SA and a venture including Poste Italiane SpA are the front-runners to acquire the business, people familiar with the matter said last month. Non-binding offers exceed 3 billion euros, with the Italian lender favoring an all-cash deal, according to the people.
The shares rose 1.9 percent to 2.11 euros at 12:41 p.m. in Milan. They have dropped about 58 percent this year, giving the company a market value of 12.9 billion euros.