UniCredit’s Andrea Orcel pushes to repair damaged relationship with Rome

UniCredit boss Andrea Orcel has hired a top public relations firm to repair his bad reputation with Italian bureaucrats and government officials after the failed takeover of Monte dei Paschi di Siena last year.

The move comes as the chief executive of Italy’s second-largest bank attempts to bolster its domestic business, which accounts for nearly half of its revenue.

Relations with Rome were strained last year after UniCredit’s long-planned takeover of troubled bank Monte dei Paschi di Siena – majority state-owned following a 2017 bailout – was derailed after the two parties failed to agree on the amount of capital that would need to be injected for the deal to go through. Orcel’s request for 6.5 billion euros was almost double what the state had expected.

Orcel has been accused by Italian authorities of thwarting plans Rome had been working on for months. The collapsed deal forced Italy to seek an extension from the European Commission until a 2021 deadline to exit MPS’s capital.

In an effort to rebuild bridges between the bank chief and Italian institutions, UniCredit this summer hired Gianluca Comin, a seasoned institutional affairs and communications specialist and founder of Rome-based Comin & Partners, according to three people. in Rome and Milan.

Comin declined to comment. A UniCredit spokesman declined to comment on the hiring, but said “Italy’s success is critical to the success of the group as a whole” and “it is clear we can and must do more to accelerate the transformation of our Italian operations”.

The move to cement relations with Roma is seen as crucial to safeguarding the bank’s domestic business, according to several people familiar with the communications strategy.

“Andrea may have worked abroad all his life, but he grew up in Rome and he’s fully aware of how things work here,” said one of the Rome locals. “He is committed to the work and he has taken the issue of mending his relationships into his own hands.”

Orcel has bolstered its weight in the bank’s domestic market and last month took over as head of UniCredit’s Italian operations from Niccolò Ubertalli, whom he appointed just over a year ago.

UniCredit has “redesigned our organization in Italy to enable our Italian operations to remain close to all our stakeholders and act in their best interests while navigating the expected volatile environment and balancing our support for the ‘Italy as a whole,’ Orcel said. the Financial Times.

Since taking office in early 2021, UniCredit investors have credited Orcel with improving the group’s performance and averting a sudden exit from Russia that could cost up to $7 billion. euros.

However, although UniCredit has invested in some of Italy’s struggling state-owned companies, the former head of UBS’s investment bank is seen as “unreliable” in Rome, according to a senior Italian official.

A spokesperson for the Italian Treasury in Rome declined to comment.

The clash sparked by the failed MPS deal continued this year as UniCredit considered taking control of smaller local rival Banca Popolare di Milano – the country’s third-largest lender, with operations concentrated in the northern Italy.

In April, UniCredit executives held a conference call with representatives of the European Central Bank and the Bank of Italy to inform the ECB that they had begun the due diligence process on a possible BPM takeover. , according to three people familiar with the call.

The next day, the news was leaked to an Italian newspaper and BPM’s stock price rose more than 10%. UniCredit pulled out of the deal.

The Bank of Italy and the Italian Treasury were forced to deny they were the source of the leak, following local media reports, but the incident was seen as indicative of the damaged relationship between Orcel and the government.

Italy will now lead Monte dei Paschi’s next €2.5 billion capital raise, contributing €1.4 billion of taxpayers’ money.

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