UniCredit reports larger-than-expected quarterly losses when Mustier retires

Milan-based UniCredit showed a quarterly loss of € 1.18 billion. After write-down on goodwill in its commercial and investment banking department, and when Jean Pierre Mustier resigned as CEO.

The loss is almost double what analysts had expected. The Italian lender said on Wednesday that it had accelerated its clean-up of the balance sheet and strengthened core capital, paving the way for a proposed capital allocation of 1.1 billion. Euro through dividends and share buybacks.

The bank’s net profit for the full year 2020 was € 1.3 billion. Thanks to lower costs ahead of expectations of € 800 million.

“UniCredit’s underlying net profit was impressive given the impact of Covid-19 on all markets and the 5 billion Euro in loan provisions, “Mustier said on his last day as CEO.

The Frenchman announced that he was leaving the bank last year after clashes with the board. His successor, Andrea Orcel, a former UBS investment banker, will join the bank after the general meeting in April.

The lender said it had appointed its co-Chief Operating Officer, Ranieri de Marchis, as general manager pending Orcel’s arrival.

Andrea brings a wealth of experience to the bank and an impressive track record in international financing. He is well placed to take UniCredit on the next stage of his journey, ”Mustier said in a statement.

Orcel’s first task will be to decide whether to take over besieged state-owned lenders Monte dei Paschi di Siena, as demanded by the Italian Government.

Monte dei Paschi is one of the topics that has proven to be the most controversial between Mustier and the board. While international investors have expressed skepticism about the affiliation, analysts expect Orcel to complete the deal if it can secure good terms for shareholders.

The incoming president told Italian media last week that UniCredit would look at more trading opportunities, not just on Monte dei Paschi.

“A solid set of results for [UniCredit] but questions about the outlook are likely to continue, ”said Benjie Creelan-Sandford, a Jefferies analyst.

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