By Giovanni Legorano 

ROME -- UniCredit Chief Executive Jean Pierre Mustier will step down in April over a rift with the board over future strategy at Italy's second largest lender.

Mr. Mustier, one of the best known figures in European finance, said it had become clear in recent months that the core pillars of his strategy for the bank "no longer correspond to the board's current thinking." He said he had therefore decided to retire from the bank at the end of his term in April 2021.

Over four and half years, Mr. Mustier succeeded in strengthening UniCredit, making it leaner and more profitable.

This year, pressure mounted on him to do deals, something he had ruled out, after Italian rival Intesa Sanpaolo SpA took over UBI Banca SpA, overtaking UniCredit as Italy's largest bank by assets in the process.

He had chosen instead to concentrate on share buybacks and dividend increases, part of a four-year plan.

Mr. Mustier always has said publicly the bank preferred to use capital in this way rather than buying other European or Italian banks.

Last year the bank was the subject of media speculation over a possible tie-up with troubled German lender Commerzbank AG or France's Société Générale SA.

UniCredit also has been widely touted as the main potential buyer of Banca Monte dei Paschi di Siena SpA, Italy's perennial banking trouble spot, which was nationalized in 2017. The government must sell it by the beginning of 2022 to meet the conditions set by the European Union to authorize the nationalization.

Mr. Mustier had set a host of strict conditions to absorb Monte dei Paschi, according to a person familiar with the matter. In turn, Italy's Treasury has been working on ways to sweeten a deal for a suitor, including tax benefits boosting the capital of the buyer.

The bank said Mr. Mustier will remain in charge of the bank either until the end of his mandate or until a successor is appointed.

Since joining UniCredit in mid-2016, Mr. Mustier cleaned up the balance sheet of the bank, which was drowning in bad loans, some of them a hangover from the financial crisis. He launched a EUR13 billion capital increase and sold several assets.

Mr. Mustier also had planned to separate the riskier domestic assets of the bank from its foreign assets, which include large businesses in Germany, Austria and Eastern Europe.

That plan had caused friction with the board after it was unveiled a year ago, although Mr. Mustier recently had said it was put on hold because the large bond-buying program of the European Central Bank had made it less urgent.

Earlier this year, Mr. Mustier was one of the final two candidates in the running to become chief executive of HSBC Holdings PLC, according to people familiar with the matter, before he withdrew from the talks. He also has been linked with the top jobs at other European lenders, including Deutsche Bank AG.

Write to Giovanni Legorano at giovanni.legorano@wsj.com

 

(END) Dow Jones Newswires

November 30, 2020 17:51 ET (22:51 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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