© Reuters. FILE PHOTO: Unicredit bank logo is seen in the old city centre of Siena
© Reuters. FILE PHOTO: Unicredit bank logo is seen in the old city centre of Siena


MILAN (Reuters) – Italy’s UniCredit will hold informal discussions on Sunday on governance issues, a person familiar with the matter said, as doubts mount over the future of Chief Executive Jean Pierre Mustier.

Mustier’s mandate comes up for renewal in the spring, and three people familiar with the matter said there was a growing rift with the board over strategy which called into question whether he would stay on as CEO.

UniCredit declined to comment.

A potential bid for bailed-out Monte dei Paschi di Siena and a plan to split UniCredit’s domestic and foreign assets are the focus of tensions, the people said.

Il Sole 24 Ore reported on Sunday the board was set to discuss conditions set by Mustier to stay on at Italy’s only “global systemically important” bank for another three years.

But the person said directors would only have an informal discussion before kicking off the process of renewing the board next week.

UniCredit has already said it will put forward former Economy Minister Pier Carlo Padoan for the role of chairman.

Seen at risk of leaving UniCredit after presiding over its turnaround, Mustier this year turned down the top job at HSBC.

Since his arrival in mid-2016, he has rid UniCredit of most of its problem debts, while raising cash from investors and selling assets for more than 25 billion euros ($30 billion).

After politics sank his efforts to seek a cross-border merger, Mustier has ruled out mergers and acquisitions even as consolidation sweeps Italy’s fragmented banking sector.

Sources have said Mustier is resisting government pressure to take on ailing Monte dei Paschi, which the Treasury is working to re-privatise to meet a commitment taken with Brussels at the time of the bailout.

Mustier has set strict conditions on any potential deal and the Treasury is working on incentives to ease a sale of its 68% stake in Monte dei Paschi, the sources have said.

By prompting banking supervisors to ban dividends and share buybacks, the pandemic has frustrated Mustier’s strategy of returning excess cash to shareholders.

Earlier this month he said also a plan to spin off UniCredit’s foreign assets had been put on hold.

The plan to separate activities in Germany and Austria from UniCredit’s riskier domestic business has become less urgent due to the European Central Bank’s massive bond buying, which dampens risk premiums across different countries, Mustier said at the time.

Sources however had said the scheme had caused friction within the bank.

UniCredit will update its business plan in the second quarter, and is working with JPMorgan (NYSE:) and Goldman Sachs (NYSE:) on strategy.

($1 = 0.8360 euros)

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