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

UniCredit chief Andrea Orcel has hired a major 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 tries to bolster UniCredit’s domestic business, which accounts for almost 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 after a 2017 bailout – was derailed by demands from Orcel of 6.5 billion euros to the government. with the case.

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

In a bid to rebuild bridges between the bank’s chief and Italian institutions, UniCredit hired Gianluca Comin, a seasoned institutional affairs and communications specialist and Rome-based founder of Comin & Partners, earlier this summer, according to three sources. 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 put increased weight in the bank’s home 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 its takeover in early 2021, UniCredit investors have given credit to Orcel for improving the group’s performance and avoiding a sudden exit from Russia that could cost up to 7 billion euros.

However, and 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 dragged on 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 north from 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, BPM’s share price rose more than 10% and UniCredit pulled out of the deal.

The Bank of Italy and the Italian Treasury have been forced to deny they were behind the leak, following local media reports, but the incident is 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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