Magazine article Global Finance

Ghizzoni Boosts UniCredit with Daring Capital Raising

Magazine article Global Finance

Ghizzoni Boosts UniCredit with Daring Capital Raising

Article excerpt

ITALY

While many big wigs in the world of finance hit the World Economic Forum in Davos, Switzerland in late January to rub shoulders with glamorous attendees from business, politics and showbiz - this year led by Rolling Stones frontman Mickjagger - Federico Ghizzoni, UniCredit's beleaguered CEO, decided to skip the annual jamboree in favor of rebuilding of his struggling bank.

In December, UniCredit was told by the European Banking Authority that stress tests showed the bank needed an extra euro8 billion in capital by the end of June. This came as no surprise to UniCredit, which is one of the most systemically important banks in Europe, with operations in 22 countries. It had already announced a massive strategic review in mid-November and announced a euro7.5 billion rights issue to raise capital.

UniCredit's problems look like Europe's banking crisis in microcosm. Despite some impressive assets in Italy, Germany and across CEE, at the beginning of January it had a euro38.8 billion exposure to Italian government bonds - and plenty of exposure to other stricken European countries. …

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