Newswire

From September 2010 the OMFIF Newswire was integrated into the bi weekly OMFIF Commentary and complimented in late December 2010 by the OMFIF blog.

Libyan sovereign fund stake leads to Profumo ouster at UniCredit

A 2.6% stake in UniCredit held by Libya’s sovereign fund became the wedge used by political opponents to oust chief executive Alessandro Profumo.

Profumo, who built a mid-tier Italian bank into a sprawling international institution with operations in 22 countries during his 15 years at the helm, tendered his resignation on Tuesday as the board debated his future.

The stake held by the $65bn Libyan Investment Authority disclosed last month, when combined with the nearly 5% held by Libya’s central bank, made the northern Italian politicians who dominate the board of the Milan-based bank uncomfortable with the possible dilution of their control.

For one thing, Profumo’s opponents charged, the added Libyan stake violates the ban on a single shareholder owning more than 5% of the bank – as both institutions report to Libyan leader Muammar Ghaddafi.

However, Italian commentators generally considered the Libyan stake simply an excuse for board members to reassert control and get rid of Profumo. The local politicians who control the stakes in UniCredit support the objective of Northern League chief Umberto Bossi to keep the upper hand in banks in their region.

UniCredit has also underperformed its domestic rivals during the economic downturn in the wake of the financial crisis, while its international focus led the Italian politicians to charge that it was neglecting hard-pressed clients in its home country.

Ironically, the German chairman Dieter Rampl, who headed Bayerische Hypovereinsbank at the time of its 2005 merger with UniCredit, will take over as temporary CEO while the bank searches for a replacement for Profumo.

 

Issue Articles

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Issue No: 32 - 22 September 2010

Issue Select: 22 Sep 201015 Sep 201008 Sep 201025 Aug 201011 Aug 201028 Jul 201014 Jul 201030 Jun 201023 Jun 201016 Jun 201009 Jun 201002 Jun 201026 May 201019 May 201012 May 201005 May 201028 Apr 201021 Apr 201014 Apr 201007 Apr 201031 Mar 201024 Mar 201017 Mar 201010 Mar 201003 Mar 201024 Feb 201017 Feb 201010 Feb 201003 Feb 201027 Jan 201020 Jan 201013 Jan 2010

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Libyan sovereign fund stake leads to Profumo ouster at UniCredit

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