UniCredit sells stake in Polish bank Pekao

ROME: Italy’s biggest bank by assets, UniCredit, said on Thursday it was going to sell a 32.8 per cent stake in Polish subsidiary Pekaoto insurance company PZU and state development fund PFR for 2.4 billion euros ($2.6 billion).

The announcement came ahead of the 13 December presentation of an industrial plan expected to focus on a capital increase of up to 13 billion euros. The asset sale may reduce the amount of money the bank has to raise on capital markets.

UniCredit is bolstering its capital after a near-fail mark in recent banking stress tests. Its CET 1 figure - a key index of financial strength that compares the bank’s holdings to debt - stands at 10.8 per cent, against an industry standard of around 13 per cent.

It said its CET 1 ratio would improve to 11.4 per cent after the Pekao sale, and more money would be raised by selling UniCredit’s last 7.3 per cent stake in the Polish bank on the market via secured equity-linked certificates.

Unicredit announced another looming asset sale on Monday, saying it had entered into exclusive talks with French asset manager Amundi on the acquisition of asset management company Pioneer - a deal thought to be worth as much as 3.5 billion euros. The bank, saddled by too many bad loans like the majority of its Italian peers, hired a new chief executive in July, Frenchman Jean-Pierre Mustier.

Speaking before a Wednesday gala premiere at the La Scala opera house in Milan, Mustier said he was confident that UniCredit would sort itself without any state help, and said Italy’s political crisis was”not a problem.” — dpa