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UPDATE 2-Mediobanca CEO sees no sense in merger with UniCredit

05/11/2021 07:52
UPDATE 2-Mediobanca CEO sees no sense in merger with UniCredit

Adds quotes from analyst call

- Mediobanca's MDBI.MI Chief Executive Alberto Nagel on Tuesday dismissed the idea of a potential merger with bigger rival UniCredit CRDI.MI, saying it made little sense.

The idea of a combination between the Milanese investment bank and UniCredit has been floated in financial circles following the appointment last month of veteran dealmaker Andrea Orcel as CEO of Italy's second biggest bank.

Orcel last week said he was open to considering potential mergers and acquisitions to foster growth at UniCredit as he works to boost profits and capital returns. nL8N2MT0Z8

Analysts have said an acquisition of Mediobanca would provide UniCredit with in-house wealth management and consumer finance operations while strengthening its corporate and investment banking business.

But Nagel said a tie-up would not be very beneficial for either player.

"In finance one can dream up all sorts of ideas, but from an industrial standpoint it's a combination that would be of little use for either company," he told a media call after Mediobanca reported results for the January-March period.

"To combine a specialised investment bank with a universal lender is a transaction that makes little sense and yields few benefits for either bank," he said.

Nagel told analysts Mediobanca would lose revenues if it were taken over by a large commercial bank while opportunities to cut costs would be few.

Being deprived of its independence could also lead to client losses at Mediobanca, he added.

Nagel said he had spoken with Orcel over the phone but was yet to meet him, though he expected that would happen soon.

"I'm happy someone with his background can work for an Italian bank, it's a way of repatriating brains and talents," he said.

Three decades in investment banking, first at Merrill Lynch <BAC.N> and then UBS UBSG.S, have made Orcel one of Europe's best known bankers.

Orcel has returned to his home country just as the banking sector gears up for further consolidation following Intesa's ISP.MI takeover of UBI last year and Credit Agricole's CAGR.PA recent acquisition of Creval PCVI.MI.

Mediobanca on Tuesday reported higher-than-expected quarterly earnings thanks to a surge in revenues driven by fees and trading. nL8N2MY4H7

(Reporting by Gianluca Semeraro, writing by Valentina Za; editing by Jane Merriman)

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