UNCFF Unicredito SPA (PK)

By Giovanni Legorano and Patricia Kowsmann 

Andrea Orcel, one of Europe's best-known bankers, has been picked to lead Italy's UniCredit SpA, according to a person familiar with the process, marking a surprise comeback amid his continuing legal fight with Spanish lender Banco Santander SA.

The pick, which still needs to be approved by the board, ends a monthslong search during which the bank scrambled to find a replacement for Frenchman Jean Pierre Mustier, who in November said he would step down after a rift with the board over future strategy.

For Mr. Orcel, the appointment represents a return following a very public clash with Santander and its powerful executive chairman, Ana Botin, who in 2018 offered Mr. Orcel the CEO post only to cancel it months later. Mr. Orcel is suing the bank for EUR100 million, equivalent of $121 million.

Mr. Orcel had been keen on getting the UniCredit job, flying frequently to Italy from London over the past weeks to lobby for the position, according to people familiar with the situation.

Mr. Orcel couldn't be reached for comment. A UniCredit spokesman declined to comment.

Mr. Orcel would arrive at a key time for UniCredit.

The coronavirus pandemic and a prolonged period of negative interest-rates are forcing banks in Europe to take a close look at their strategies. Last year, Italian rival Intesa Sanpaolo SpA took over UBI Banca SpA, overtaking UniCredit as Italy's largest bank by assets in the process.

UniCredit's board is open to bulk up through acquisitions, including by potentially acquiring Banca Monte dei Paschi di Siena SpA, Italy's perennial banking trouble spot, which was nationalized in 2017 and needs to be reprivatized by next year. Mr. Mustier resisted the idea. He also clashed with the board on a project he defended to split the bank's domestic and foreign operations to insulate its businesses in Germany from Italian-sovereign risks.

Mr. Orcel's experience in deal making -- first at Bank of America Merrill Lynch and then at UBS Group AG as head of investment banking between 2012 and 2018, which would bode well if UniCredit wants to explore mergers.

But the Italian would arrive with some baggage.

In 2018, Mr. Orcel left UBS after being offered the CEO post by Ms. Botin. But the deal fell through months later after Santander said it couldn't justify his EUR50 million-plus price tag, which included compensating him for shares he would leave behind at UBS.

Furious, Mr. Orcel sued Santander for EUR100 million in damages, alleging the bank offered him a contract and broke it. It left his close professional relationship with Ms. Botín in tatters. At some point, Mr. Orcel told Santander's board secretary that Santander's U-turn "destroyed my career, my reputation."

On the job, Mr. Orcel had a reputation of being abrasive and sometimes harsh with staff, according to people familiar with his style. He also lacks experience running a bank with retail and commercial operations.

But he ticks other boxes: he is Italian but has international experience and can operate at ease in European financial capitals from London to Frankfurt. His investment-banking experience could also come handy as it sets sight on potential takeover opportunities.

UniCredit sounded out other candidates for the job, but given it was set on an Italian, its list of high-profile names with the right experience was relatively limited.

Another front-runner was Fabio Gallia, a former board member at French giant lender BNP Paribas and head of the French bank's Italian branch. Mr. Gallia held other positions at different companies and financial institutions, including Italian government-controlled development bank Cassa Depositi e Prestiti.

Another candidate considered for the job is Flavio Valeri, the former head of Deutsche Bank's Italian branch.

Write to Giovanni Legorano at giovanni.legorano@wsj.com and Patricia Kowsmann at patricia.kowsmann@wsj.com

(END) Dow Jones Newswires

January 26, 2021 12:45 ET (17:45 GMT)

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