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Milan / AFP
UniCredit said on Thursday it had raised over half a billion euros as part of its latest asset sale, part of Italy’s largest bank’s effort to boost its funds without raising capital from shareholders.
The 552 million euros ($609 million) from the sale of 20 percent of its online banking subsidiary Fineco will be used to boost Unicredit’s core capital — the amount of funds available to absorb losses — which has recently fallen perilously close to European banking limits.
Unicredit, Italy’s largest bank by assets, said the funds should add 0.12 percentage points to Core Tier 1 ratio, which had fallen to 10.3 percent in June.
UniCredit was among the worst performing banks in stress tests by the European Banking Authority in late July and has been seeking to strengthen its position in terms of capital.
The bank has been reluctant to raise more capital from shareholders as its share price has been hammered this year due to wider problems in the Italian banking sector.
With its share price having fallen by around 60 percent since the beginning of the year, Unicredit would need to issue a huge number of shares, thus considerably reducing the size of the stakes of existing shareholders, to raise the needed funds.
Its shares were down 2.5 percent to 2.05 euros in afternoon trading on the Milan stock exchange, which was down 1.5 percent overall.
New chief executive Jean Pierre Mustier, appointed in July, launched an extensive strategic review and has instead choses to raise funds by selling off assets.
He gave the green light to both the 30 percent sell-off of Fineco shares and a 10 percent slice of Polish bank Pekao.
Unicredit is mulling shedding other assets, such as Pioneer Investments, its fund management arm, or the remaining 40.1 percent stake it holds in Pekao. Negotiations for the latter are underway with insurance group PZU, of which 35 percent is owned by the Polish state.
Mustier will present his new industrial plan in London on December 13.
Thursday’s transaction leaves Unicredit with a controlling stake of 35 percent in Fineco.