2024-09-27 22:31:27
par Valentina Za and Stefania Spezzati
MILAN/LONDON (Reuters) – After taking the helm of Italian bank UniCredit in 2021, veteran investment banker Andrea Orcel vowed not to repeat the mistake he saw many bosses make: giving in under pressure to close deals.
But the opportunity to celebrate a rare cross-border European banking marriage, a rapprochement deemed almost impossible by friends and foes alike, is the moment to try everything.
Andrea Orcel angered the German government this month by surprise buying part of Commerzbank and pushing for a merger with Germany’s second largest listed bank.
Such a merger, which would give birth to a new large pan-European bank, is a wish long expressed by regulators to better compete with the giants of Wall Street but often brushed aside by politicians.
“He’s clever, daring and determined. He doesn’t accept being told no,” comments Filippo Alloatti, head of financial credit at Federated Hermes. The fund manager is invested in both UniCredit and Commerzbank.
Under the governance of Andrea Orcel, UniCredit shares quadrupled, making it a significantly more profitable bank than its coveted German rival. And this despite the weight of the Italian debt.
“There remained a big strategic question: what will be the future of UniCredit?”, recalls Filippo Alloatti. “Now we have the answer.”
German Chancellor Olaf Scholz, board members and bank employees who fear losing their jobs have rejected Andrea Orcel’s plan as a “hostile attack.”
Completing a cross-border European merger large enough to reshape the banking landscape would give Andrea Orcel a second chance to show that large, complex banking deals can work.
The former investment banker was one of the architects of the disastrous acquisition of Dutch bank ABN Amro by the Royal Bank of Scotland which resulted in the collapse of both lenders during the global financial crisis.
Andrea Orcel has not yet hired counsel since formal negotiations have yet to begin, a person familiar with the bank’s strategy said.
The acquisition of 21% of Commerzbank through shares and derivative products, subject to approval by the European Central Bank, is for the moment only a financial investment, clarified the bank’s boss Italian at a banking conference this week.
The 61-year-old said he would walk away from a possible deal if he failed to get what he wanted: ‘Don’t underestimate how disciplined we are,’ he warned .
Its first steps, however, demonstrate a desire to move forward: the negative reaction which followed the unveiling of UniCredit’s initial 9% stake in Commerzbank on September 11 provoked a change of tactics, reports a source close to the bank. The Italian bank relied on derivatives to increase its stake after the German government announced it would no longer sell Commerzbank shares. Contacted by Reuters, UniCredit declined to comment.
TOWARDS THE SUMMIT
Andrea Orcel’s current and former colleagues describe a demanding, always-on style that is partly responsible for high turnover of senior executives and division heads at UniCredit, contrasting with the stability of arch-rival Intesa Sanpaolo .
The executive left his role as head of the UBS investment bank in 2018, after growing impatient to take the helm of the banking group, to become chief executive of Santander. But the Spanish bank withdrew its proposal due to a disagreement over salary. After a public legal battle, Andrea Orcel was awarded millions of dollars in damages.
UniCredit insiders say the executive is extremely discreet about his decision-making, a habit he picked up as an investment banker when he wouldn’t even tell his employer what he discussed with clients, reports l ‘one of them.
When he arrived at UniCredit, the man surprised by not distributing paper copies of the presentations projected during the meetings, a senior person at the bank told Reuters.
Unlike some of her peers, Andrea Orcel does not seek to establish links with the political world. During an event in Rome last week, the former investment banker made a U-turn as he was about to greet Giorgia Meloni, president of the Council of Ministers, to avoid waiting in line .
He has also shown on several occasions that he would not hesitate to antagonize or challenge those in power, as when he angered Rome in 2021, by abandoning the takeover of the bank at the last minute. public in difficulty Monte dei Paschi. More recently, UniCredit challenged the ECB’s demand to reduce its activities in Russia.
Andrea Orcel “put himself in a dead end” by pursuing an agreement with Commerzbank amid so much opposition but wants to leave a mark, nevertheless believes a close friend of Orcel who worked alongside him.
(Reporting by Valentina Za in Milan and Stefania Spezzati in London, with contributions from Giselda Vagnoni in Rome, Oliver Hirt in Zurich and Tom Sims in Frankfurt, writing by Tommy Reggiori Wilkes; French version Bertrand de Meyer, editing by Kate Entringer)
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