The “modernized” UniCredit is more than half run by funds

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The ”all new” Unicredit bank , after an outstanding €13 billion capital growth, is now almost three quarters run by the market, its stakeholders meeting proved, stopping the long reign of non-profit banking foundations.
21 Apr 2017 – Italy 24

A total of 62% is owned by institutional investors, almost all foreign, and another 10% is owned by sovereign funds.

As was foreseeable, the avalanche of new paper has modified the structure of ownership: the banking foundations, which were previously the undisputed masters of the bank, today have 6% of the capital, while 13% has remained for retail investors, that is small savers, less than half of the 28.8% they had at the end of November.

The bank was already a public company — one of Italy’s few — and now today it is even more so. And since it’s true that the loyalty of market players is the most difficult to win, it is significant 57% of capital was represented at yesterday’s meeting, more than the 46% recorded last year when the spectrum of shareholders was narrower.

This was a success for new Chief Executive Jean Pierre Mustier, who was able to win the support of investment funds. And it was a confirmation of the unavoidable marginalization of small shareholders, traditional protagonists of the shareholders’ meeting, who yesterday did not fail to underline their displeasure over seeing that the bank that is no longer in their hands.

After the initial grumbling when voting began, there was nothing more to say: the accounts of the “old” UniCredit, that is €11.4 billion of losses in 2016 due to the heavy write downs on loans and stakes, passed with 99.9%, while the remuneration plan was also approved with a wide margin.

Mustier and the top managers have cut their salaries by 40% – with relative incentives. As already happened last week at Eni, a few funds said no; banking foundations Fondazione CrTorino and CrTrieste abstained, and the director-general of CariVerona Giacomo Marino did not vote because he had already left the room.

UniCredit shares rose a further 1.8% yesterday. Now that the markets are playing an even bigger role, the situation makes it essential to look ahead. The bank plans a further disposal of NPLs (after a “significant reduction in deteriorated credit thanks to decisive actions to reduce risk, reaching the lowest level since mid-2010, Mustier underlined), the strengthening of capital (“We are ahead on the new Basel 3 rules”) and more in general the implementation of the Transform 2019 plan, which after the forced diet of 2016, already forecasts a return to a dividend on 2017 results, equal to 20% of profits net of extraordinary items.

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