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Opinion

UniCredit shows Europe’s banking rails won’t link

Italy’s biggest bank is floundering because it is based on a flawed premise.

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Jean Pierre Mustier’s achievement in stabilizing UniCredit during his first year as chief executive was all the more impressive because he did so even while preserving its status as a pan-European commercial bank.

Today it remains the only bank with a top-tier operation in more than one big European economy, holding on to HVB – the German bank UniCredit purchased in the mid 2000s under then-CEO Alessandro Profumo.

When Mustier arrived as chief of Italy’s biggest bank in 2016, don’t forget, there were voices saying it should sell HVB. That would have been easier said than done, though. And keeping it has come with large costs, especially for UniCredit’s domestic business.

UniCredit’s presence in its home market leaves much to be desired – it has plenty of room to grow in the country’s most attractive regions – yet Mustier has repeatedly stepped back from M&A with lenders in Italy’s north.

Moreover, aside from cutting good businesses in Turkey and Poland, he has sold Italy-focused asset management arm Pioneer and the Italian online broker Finecobank, which could otherwise have played into Italy’s thriving wealth management market.

Mustier’s fluent arguments for selling these assets and refusing to do M&A in Italy now look less and less convincing.


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