MILAN: The chief executive of UniCredit has a plan to revive his company's ailing share price: make it less Italian.
Mustier, a Frenchman appointed in July 2016 to reinvigorate the then weakly capitalized Milanese bank, has sold businesses, cut jobs and shut branches to strengthen UniCredit's balance sheet. Sources earlier this year said the bank had put on ice a possible bid for German rival Commerzbank . "The bank has to be ready for that kind of possibility," the person said, noting Moody's currently rates the euro zone's third biggest economy - burdened with the second highest debt to GDP ratio in the single currency bloc - just one notch above non-investment grade. Germany has a triple-A rating with all major credit ratings agencies.
"UniCredit is by size one of Europe's leading banking groups but, because of its Italian roots, investors associate it with the Italy risk to an extent which is in my opinion excessive given its geographical diversification," Stefano Caselli, banking and finance professor at Milan's Bocconi University.
The European Central Bank would have to approve the plan to set up the holding company in Germany - where UniCredit already owns lender HVB - potentially taking at least a year, meaning the shift would not happen for sometime.Mustier has repeatedly said that UniCredit will remain listed and headquartered in Milan and reiterated the bank's commitment to its home country.
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