UniCredit’s Orcel Says He’s Open to Deals to Restore Growth

UniCredit SpA new Chief Executive Officer Andrea Orcel signaled he’s open to pursuing takeovers, hinting at a more ambitious growth strategy after a long period of retrenchment under his predecessor.

Orcel, in his first public comments in the role, said his aim is to move UniCredit away from restructuring to delivering sustainable returns, with deals as one potential option to reach strategic goals faster. After a clean-up under former CEO Jean Pierre Mustier, the bank is in a strong position in terms of capital, liquidity and asset quality, he said.

“With respect to M&A, it is not a purpose in itself but I do see it as an accelerator and a potential improver of our strategic outcome where it is in the best interests of shareholders and where we have full confidence in our ability to execute it,” Orcel said on a call Thursday presenting the bank’s first-quarter results.

Orcel, a consummate dealmaker who advised on some of Europe’s largest transactions, has been tasked with laying out a strategy for growth after doubts over the bank’s direction helped prompt the exit of Mustier, who had cleaned up the bank and made it leaner. UniCredit on Thursday joined European peers in posting a stronger-than-expected first quarter amid a surge in trading and lower provisions for bad loans.

Read more: UniCredit Gets Boost From Fees, Trading as Orcel Era Starts

Shares of the lender extended gains after Orcel’s comments, rising 5.2% at 10:54 a.m. in Milan, the best performer among the large European banks.

Orcel, the former top investment banker at UBS Group AG, is confronting a series of challenges. UniCredit recently lost the crown of Italy’s biggest bank after Intesa Sanpaolo SpA bought smaller rival UBI Banca SpA.

The bank is also facing pressure from the government to take over troubled lender Banca Monte dei Paschi di Siena SpA. Talks between the two firms stalled earlier this year with the exit of Mustier, which left the lender without a leader until Orcel took over on April 15.

Banco BPM -- Italy’s third largest bank -- would be one of the better fits for UniCredit, allowing it to expand in the rich Lumbardy region and add lucrative segments to its business, according to brokerages including Bestinver.

In his new role, Orcel is finally getting a chance to lead a major European bank. After years waiting behind Sergio Ermotti at UBS, he jumped in 2018 to take the CEO spot at Santander SA, a lender he had a long history of advising. That move blew up in a dispute over pay, leaving him sidelined for the past two years as he sued the Spanish bank.

He started his banking career at Goldman Sachs Group Inc. before joining Merrill Lynch in 1992 as an adviser to financial institutions. While at Merrill, he helped arrange the 1998 combination of UniCredito and Credito Italiano, creating the institution he’s now leading.

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