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September 2009 | ifr special report | 15 ITALY Getting organised


It has been a tale of two mergers in the Italian markets. The fortunes of UniCredit and Banca IMI have been influenced by the reorganisation of their activities, either by grouping together divisions or a post-acquisition restructuring of the balance sheet to maximise efficiency. Hardeep Dhillon reports.


lishment of the investment bank in 2006. The move, completed in April this year, helped streamline the bank’s operations and generate cost and revenue synergies. In addition, the merger also accelerated the decision-making process on key business issues and further enhanced UniCredit’s capabilities to service its clients.


T “By bringing the two units together we


have been able to significantly and success- fully leverage our corporate lending relation- ships and provide clients with the necessary financing tools and solutions offered by the capital markets,” said Mike Hammond, global co-head of markets at UniCredit. It has also accelerated the decision-making process on key business issues.


The bank’s strategy to focus on core markets and core clients with core products is directed predominantly, but not solely, towards Germany, Austria, Italy and Central and Eastern Europe. “We want to ensure we are a leading player, one that is credible and more importantly very profitable in our targeted markets,” said Hammond. Coming from a position of strength in euro-denominated product allows us to provide clients the full range of financing options.” Markets and investment banking posted strong second quarter results with a net profit of €490m, an increase of 9.6% quarter on quarter, and operating profit of €728m. One of the revenue drivers has been debt capital markets, where the bank has won a significant number of mandates and launched a record number of private placements this year.


UniCredit has consolidated its position and improved its rankings within many areas of DCM. The bank has consistently been the leader in covered bonds and has


he combination of UniCredit Group’s corporate and investment banking divisions is widely seen as a natural evolution from the initial estab-


“ ”


strengthened its position in corporates, highlighted by transactions for Daimler, Fiat and ENI. It also confirmed its commitment to CEE, where it is the biggest bank, with a host of notable sovereign deals. These include a €1bn deal for Republic of Slovenia, the €750m bond for Republic of Croatia, a €5bn European Investment Bank benchmark and a €7bn Hellenic Republic offering.


Unicredit has lead managed


every single meaningful equity-linked transaction in Central Europe this year.


UniCredit is also actively building a significant equity and equity-linked platform. Activity in Italian equities has been dominated by the year’s two largest rights’ issues: Enel’s €7.978bn and Snam Rete Gas’ €3.471bn transactions.


Italian bank equity prices


120 100 80 60 40 20 0


Aug 07


Oct Dec


Feb 08


Source: Thomson Reuters Datastream Apr Jun Aug Oct Dec


Feb 09


UniCredit Mediobanca Banca IMI


Equity transactions in Poland, where UniCredit has a 35% market share, include a US$220m capital increase for Polish vodka group Central European Distribution Corp, the largest transaction in emerging Europe outside Russia. UniCredit is also mandated for PKO Bank’s capital increase and a €1bn deal for PGE, Poland’s leading utility.


Karim Makki, head of equity-linked origination,forecasts greater equity-linked activity out of Italy with further take-up from regional banks, as well as corporates. UniCredit opened the CEE equity-linked market with Bulgarian Chimimport’s €102m offer of mandatory convert preferred shares. The bank is joint bookrunner on the largest equity-linked transaction in CEE for the Hungarian government, a €800m exchangeable bond into Gideon Richter shares.


“Unicredit has lead managed every single meaningful equity-linked transaction in Central Europe this year. The group has maintained its leading position through a strong commitment to clients and faultless execution, despite challenging markets,” said Makki.


In structured products, UniCredit has continued to build its franchise, with


Apr Jun Aug


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