A Long-Awaited Resignation

Federico Ghizzoni, chief executive officer of UniCredit SpA, listens during a news conference announcing the bank's first-quarter results in Milan, Italy, on Tuesday, May 10, 2016. UniCredit, Italy's largest bank, reported first-quarter profit that beat estimates after provisions for bad loans were lower than expected. Photographer: Alessia Pierdomenico/Bloomberg *** Local Caption *** Federico Ghizzoni
Federico Ghizzoni, Unicredit man on the way out.
  • Why it matters

    Why it matters

    After months of speculation, Federico Ghizzoni was sacked as CEO of Unicredit. The Italian bank’s poor capital ratio may lead to asset sales, including its stake in Germany’s Hypo-Vereinsbank.

  • Facts


    • Both Unicredit CEO Federico Ghizzoni and Chairman Giuseppe Vita are likely to lose their positions in the very near future.
    • The bank’s share price has fallen by over a half in the last year, and its capital ratio is seen as dangerously thin.
    • The new chief executive will need to raise capital, and asset sales can not be ruled out. This could include floating a stake in the Bavarian bank Hypo-Vereinsbank, bought by Unicredit in 2008.
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Federico Ghizzoni, as always, was a busy man on Monday. He had an appointment at the Madrid Stock Exchange, then the opening of the new headquarters of Unicredit Spain, then a meeting with King Felipe of Spain.

But while the Unicredit chief executive worked through this schedule, a constant stream of rumors came out of Italy. In short: Mr. Ghizzoni was about to be fired.

Eventually, despite being 1,200 kilometers from Unicredit’s Milan headquarters, the rumors caught up with Mr. Ghizzoni. Forced to make a statement, Mr. Ghizzoni dismissed the rumors with a grandly sovereign touch.

“Nothing dramatic is taking place in the group, the situation is absolutely under control, there are no tensions whatsoever,” he claimed.

And, he added, there is no reason whatever for his bank to raise new capital. In recent months, this last point has become his mantra.

It is fair to say his statement was greeted with skepticism. No tensions? No new capital? In Italian financial circles, it was already clear that the country’s largest bank would hand in his resignation – or have it handed to him – on Tuesday.

An extraordinary meeting of the supervisory board took place Tuesday afternoon. By the late evening, Mr. Ghizzoni had agreed to resign. He will remain chief executive only until his successor is in place. That could be as soon as the next supervisory board meeting June 9.

For more than a year, shareholders have watched as the stock price has plunged in value. The bank’s shares have been among the hardest hit this year in Europe, suffering from similar ails to rivals Deutsche Bank and Credit Suisse, both of which replaced their own chief executives in the past year.

Events in Milan will also be watched with particularly keen interest in Munich, at the headquarters of Hypo-Vereinsbank, one of Germany’s largest banks, which was swallowed up by Unicredit in the fall of 2008.

Here, the rumor mill is running at full tilt. The speculation is that if the new Unicredit boss wants to raise cash, they may also look to re-list the Bavarian bank.

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