Bloomberg News

UniCredit Said to Be Near Exit of Western Europe Equity Business

November 25, 2011

Nov. 12 (Bloomberg) -- UniCredit SpA, Italy’s biggest bank, is close to exiting research, sales and trading for western European equities as part of its plan to revive profitability, according to two people with knowledge of the discussions.

The board, which meets on Nov. 14, will weigh an agreement to transfer equity units that employ about 150 people to a competitor, said one of the people, who declined to be identified before a decision is made. UniCredit may incur a cost as part of such an arrangement, and the Italian bank, which initially won’t have a stake in the merged business, will retain its central and eastern European brokerage, said the person. A spokeswoman for Milan-based UniCredit declined to comment.

Jean Pierre Mustier, UniCredit’s corporate and investment- banking chief, is reviewing the unit as the lender concentrates on businesses such as arranging bond sales and loans in its core markets of Germany, Italy, Poland and Austria. UniCredit is also considering a capital increase of as much as 7 billion euros ($9.6 billion) to fill a funding gap, people with knowledge of the matter said on Nov. 10.

UniCredit last month reorganized its securities sales to combine regional activities within equities and credit after hiring Jakob Groot and Michael Baptista. Cash equity sales are headed by Baptista in London, the bank said on Oct. 25.

The bank’s equity-research unit covers about 400 companies from Munich, Vienna, Milan and London. The firm’s equity-sales business isn’t among the top three in Italy and Germany as ranked by Thomson Extel in its 2010 survey.

--With assistance from Zijing Wu in London. Editors: Keith Campbell, Otis Bilodeau.

To contact the reporters on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net; Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net; Francesca Cinelli in Milan at fcinelli@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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