New Unicredit CEO Shakes Up Bank's Top Ranks

ROME—UniCredit SpA announced a management reshuffle and a new structure aimed at cutting costs and improving decision-making at Italy's largest lender, one of the first major moves by its new chief executive officer, Jean Pierre Mustier.

Under the shake-up, Chief Financial Officer Bernardo Mingrone will leave the bank and be replaced by Mirko Bianchi, currently finance director of UniCredit's Austrian unit.

Chief Operating Officer Paolo Fiorentino also will leave the group. Two new co-chief operating officers, Ranieri de Marchis, currently head of internal audit, and Francesco Giordano, currently finance chief of German subsidiary HVB, will take his place.

UniCredit also appointed Gianni Franco Papa as general manager; he's currently deputy general manager and head of the bank's corporate and investment banking division. In the newly expanded role, Mr. Papa will focus on developing the bank's client offer and maximizing cross-selling and value creation throughout UniCredit's divisions, the bank said.

The new structure aims to reduce costs and simplify procedures throughout the bank. It is one of the first major changes by Mr. Mustier, who became chief executive officer at the end of June, more than a month after former CEO Federico Ghizzoni agreed to step down.

"The reorganization announced today is the first step in the simplification of the group. My objective is to streamline and improve its efficiency," Mr. Mustier said on Tuesday.

Mr. Mustier is leading a review of strategy at the bank, which has suffered from low profitability and must manage a large load of bad loans. The new CEO is looking to cut costs and find more effective ways of selling the bank's products to raise revenue and profit. Mr. Mustier is due to present a new plan by year's end.

The review is a critical part of a broader plan that also will include raising fresh capital and selling prized assets.

UniCredit has been under pressure for some time to come up with a new strategy to tackle its low profitability and reduce its non-performing loan portfolio, but the broader crisis in confidence in Italy's banks has lent more urgency to the task in recent weeks. A post-Brexit slowdown in economic growth in Europe and the prospect of interest rates' remaining low for a long period will make it harder for Italian banks to improve their performance, a trend that has sparked a sell-off in Italian banking stocks.

Soon after Mr. Mustier took the helm of the bank, UniCredit launched the sale of a stake of up to 10% in Polish subsidiary Bank Pekao SA, in a move aimed at shoring up its capital position. The transaction followed the sale of a 10% stake in online bank FinecoBank SpA.

Uncertainty surrounding the bank's strategy has heavily penalized UniCredit's stock, which has lost more than 60% in the past year. On Tuesday, shares were falling by 2%, underperforming a slightly negative market.

-Write to Giada Zampano at [e-mail]

(END) Dow Jones Newswires

July 26, 2016 10:45 ET (14:45 GMT)

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