MILAN, April 16 (Reuters) - UniCredit’s new Chief Executive Andrea Orcel pledged to put technology at the heart of every decision he will take to steer the Italian bank on to a new course, a letter to staff a day after his appointment showed.
Orcel, former head of investment banking at UBS, started in his new role on Thursday, after narrowly overcoming an investor revolt over an up to 7.5 million euro ($9 million)pay package that makes him one of Europe’s best-paid bank executives.
After his predecessor Jean Pierre Mustier rebuilt UniCredit’s capital reserves and cleaned up its balance sheet, Orcel must find new revenue drivers for Italy’s second-biggest bank by assets to revive weak profits, analysts say.
“We need to increase our pace of digitalisation and adoption of new technologies. Technology will no longer be an afterthought ... It will be embedded in everything we do, central to every decision we make and every strategic choice that we take,” Orcel wrote to staff.
“Getting this right in a time frame that will have a material impact is critical to the success of our business, for the service that we provide for our clients and for our customers,” he said.
Orcel, a veteran dealmaker who has been tasked with studying merger and acquisition alternatives for UniCredit, will work on drafting a new business plan in coming months and reviewing the bank’s top management structure, which Mustier has structured with co-heads for the top functions.
UniCredit increased IT investments by 17% in its latest business plan presented in December 2019 to an average 900 million euros a year, with a total outlay of 9.4 billion euros in 2020-2023 when including spending on human resources and cybersecurity.
By comparison, Spain’s Santander in April 2019 pledged to invest more than 20 billion in digital and technology over the following four years.
As far as shareholders are concerned, Orcel said he would tackle the dilemma facing many lenders, which are unable to generate sufficient returns to remunerate capital because of negative interest rates and regulatory constraints
UniCredit will target “profitable growth” in “appropriate areas and in ways that are value accretive” so as to lift risk-adjusted returns above the cost of equity, he said.
$1 = 0.8344 euros Reporting by Valentina Za Editing by David Holmes