UniCredit’s Andrea Orcel pushes to repair damaged relations with Rome

UniCredit boss Andrea Orcel has hired a top public relations firm to repair his battered reputation with Italian bureaucrats and government officials following last year’s aborted takeover of Monte dei Paschi di Siena.

The move comes as the chief executive of Italy’s second-largest bank tries to bolster its domestic business, which accounts for almost half of its revenues.

Relations with Rome were strained last year after the long-planned takeover by UniCredit of the ailing Monte dei Paschi di Siena bank — majority owned by the state following a 2017 bailout — was derailed after the two sides failed to agree on the amount of capital that would need to be injected for the deal to go through. Orcel’s demand for €6.5bn was almost double what the state had envisioned.

Orcel was blamed by Italian officials for thwarting plans Rome had been working on for months. The collapsed deal meant Italy was forced to request an extension from the European Commission to a 2021 deadline for exiting MPS’s capital.

In an effort to rebuild bridges between the bank’s chief and Italian institutions, UniCredit hired Gianluca Comin, a veteran institutional affairs and communications specialist and founder of Rome-based Comin & Partners this summer, according to three people in Rome and Milan.

Comin declined to comment. A spokesperson for UniCredit declined to comment on the hire but said “the success of Italy is critical for the group’s success as a whole” and “it is clear that we can and need to do more to accelerate the transformation of our Italian operations”.

The move to shore up relations with Roma is seen as crucial to safeguarding the bank’s domestic business, according to several people familiar with the communications strategy.

“Andrea may have worked abroad his whole life but he grew up in Rome and he’s perfectly aware of how things work over here,” said one of the people in Rome. “He’s committed to the job and he’s taken the matter of fixing his relationships into his own hands.”

Orcel has been putting increased weight on the bank’s home market and last month took over as head of UniCredit’s Italian operations from Niccolò Ubertalli, whom he had appointed a little over one year ago.

UniCredit has “reshaped our set-up in Italy to enable our Italian operations to stay close to, and act in the best interests of, all our stakeholders whilst navigating the expected volatile environment and balancing our support for Italy as a whole”, Orcel told the Financial Times.

Since he took the top job in early 2021, UniCredit investors have given Orcel credit for improving the group’s performance and avoiding an abrupt exit from Russia which could cost up to €7bn.

However, despite UniCredit having invested in some of Italy’s troubled public-backed companies, the former UBS investment banking chief is seen as “unreliable” in Rome, according to a senior Italian official.

A spokesperson for the Italian Treasury in Rome declined to comment.

The clash sparked by the failed MPS deal dragged into this year as UniCredit considered the takeover of smaller local rival Banca Popolare di Milano — the country’s third-largest lender, with operations focused across the north of Italy.

In April, UniCredit executives held a conference call with European Central Bank and Bank of Italy representatives to inform the ECB they had begun the due diligence process on a potential BPM takeover, according to three people with knowledge of the call.

The following day, the news was leaked to an Italian newspaper, and BPM’s share price rose more than 10 per cent. UniCredit pulled back from the deal.

The Bank of Italy and the Italian Treasury were forced to deny they were the source of the leak, following local media reports, but the incident was seen as indicative of the damaged relationship between Orcel and the government.

Italy will now lead Monte dei Paschi’s forthcoming €2.5bn capital increase, contributing an expected €1.4bn in taxpayers money.

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