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MILAN, December 27 (Reuters) – Bank mergers should target European expansion, UniCredit IDRC.MI Chairman Pier Carlo Padoan said in a newspaper interview on Monday, warning against deals that force lenders to focus more on the domestic market.
Asked about the potential for post-pandemic banking mergers and acquisitions (M&A), Padoan told La Stampa daily that he expected the situation to prompt the sector to consolidate.
“We must not let the banks (…) become more national instead of becoming more European,” he said.
“There is a scenario, not necessarily the most likely, in which there could be more concentration in Italy and less cross-border transactions. It would be like going against the European Banking Union.”
With operations spanning 13 markets, UniCredit is the only Italian bank that regulators deem globally systemically important.
Under new chief executive Andrea Orcel, UniCredit in October backed out of a deal with the Italian government to take on bailed-out rival Monte dei Paschi BMPS.MI.
Asked if the deal could be reconsidered, Padoan said the window of opportunity had closed and UniCredit was focused on implementing the strategic plan Orcel unveiled this month. .
Orcel, a seasoned dealmaker formerly at UBS and Merrill Lynch, did not rule on mergers and acquisitions saying UniCredit could consider deals that bolster its franchise and shareholder returns.
As part of its plan through 2024, UniCredit plans to return 16 billion euros in the form of dividends and buybacks.
Padoan reiterated that the bank would consider merger and acquisition opportunities in Italy and abroad if they arise and are in the interests of shareholders.
Moving on to organizational changes triggered by the COVID-19 pandemic, he said UniCredit wanted to turn remote work into an opportunity.
“We currently require staff from central offices to come two days a week. Once the emergency has passed, we will move to a hybrid model on a voluntary basis. Naturally, in branches, the proportions will have to be very different.”
UniCredit shines on Orcel’s $18 billion payout promise to investorsID: nL8N2SU23H
(Reporting by Valentina Za Montage by Christian Schmollinger and David Goodman)
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