Italy’s Economy Minister, Giancarlo Giorgetti, recently sought clarification from UniCredit CEO Andrea Orcel regarding the bank’s potential interest in Popolare di Sondrio during a meeting held last week, according to two sources familiar with the matter. While UniCredit and Italy’s Treasury declined to comment on the matter, Orcel had previously dismissed reports about UniCredit’s stake-building in Popolare di Sondrio as “noise.”
In early January, a report surfaced, suggesting that a U.S. investment bank was accumulating up to a 10% stake in Popolare di Sondrio, potentially paving the way for an Italian lender, with UniCredit being a leading candidate, to become a significant shareholder. During the recent meeting, UniCredit’s stance on Popolare di Sondrio within the context of Italy’s banking sector consolidation process was discussed.
UniCredit CEO Andrea Orcel, heading Italy’s second-largest bank, regularly holds meetings in Rome with government representatives every quarter. While Orcel refuted claims of UniCredit buying shares in Popolare di Sondrio in a television interview, he mentioned, “We’re interested in everything, at the right price.”
The potential interest in Popolare di Sondrio could play a strategic role for UniCredit, allowing the bank to strengthen its historically weak presence in the affluent northern region, particularly in Lombardy. Popolare di Sondrio, valued at 3 billion euros according to LSEG data, offers an opportunity for UniCredit to enhance its footprint in the region.
Orcel’s approach to mergers and acquisitions (M&A) remains uncertain, keeping the financial industry guessing about UniCredit’s strategic moves. In 2021, Orcel walked away from negotiations to acquire Monte dei Paschi, and in the following year, UniCredit decided against launching a buyout offer for Banco BPM at the last minute. Any M&A deal in Italy’s financial sector requires the backing of the Italian government under the golden power rules aimed at protecting assets of strategic importance.
Popolare di Sondrio, with its estimated worth of 3 billion euros, presents a potential opportunity for UniCredit. However, any significant investment in Popolare di Sondrio would involve navigating relationships with Italian insurer Unipol, the largest shareholder in both Popolare di Sondrio and rival BPER. Unipol holds stakes of nearly 20% in each and has insurance partnerships with both institutions.
UniCredit’s shares have experienced a notable rise of 215% since Orcel’s appointment in 2021, driven by his shareholder-friendly policies. The bank has accumulated more than 10 billion euros in excess capital, prompting Orcel to pledge a decision this year on whether to enhance paybacks to shareholders or deploy the capital for a strategic acquisition. The conditions set for the use of excess capital underline Orcel’s cautious approach to balance shareholder returns and potential acquisitions. The unfolding dynamics between UniCredit and Popolare di Sondrio will likely shape Italy’s banking landscape and provide insights into the broader consolidation trends within the sector.
