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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

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Categorized | Banks, Financial

Bidders line up for UniCredit arm

Posted on September 21, 2016

ITALY-FINANCE-ECONOMY-UNICREDIT-BANK...This picture taken on February 5, 2016 shows the Unicredit logo on the Unicredit Tower in Milan. The Milan stock market fell 3.49 percent on Thursday to close at 18.190 points, dragged down by plunging bank shares after investors failed to be convinced by a 'bad bank' deal between Italy and the EU. / AFP / GIUSEPPE CACACE (Photo credit should read GIUSEPPE CACACE/AFP/Getty Images)©AFP

Italy’s banking crisis has triggered a slew of bids for Pioneer Investments just two months after UniCredit, the country’s largest bank, failed to offload a controlling stake of its asset management business to Santander.

Generali, Italy’s largest fund house by assets under management, Amundi, Europe’s biggest asset manager, and Poste Italiane, the postal service provider, are among the main contenders to buy Pioneer, which has $245bn of assets under management, according to three people familiar with the matter.

    Staff at Pioneer have been told that a deal will be finalised by the end of the year, when Jean-Pierre Mustier, UniCredit’s new chief executive, will present a strategic plan for shoring up its balance sheet.

    UniCredit, Generali and Poste Italiane declined to comment. Amundi did not immediately respond to requests for comment.

    Italian regulators support domestic ownership of Pioneer by Generali or a consortium led by Poste Italiane, because the asset manager is a significant holder of Italian sovereign debt and pension money, according to two people close to the deal.

    UniCredit, which is Italy’s largest lender by total assets, has lost more than half its market value since the start of the year over concerns about non-performing loans and the Italian banking sector.

    It ranked sixth from the bottom in European bank stress tests published in July and analysts said a sale would provide crucial capital for the lender.

    “This is one of the assets that they could monetise — in 2014 they were in less trouble,” said one analyst who declined to be named.

    The bank, in effect, put Pioneer up for sale two years ago in an effort to cut costs and raise capital. But a €2.75bn deal to combine it with Santander’s asset management arm fell through in July because of regulatory obstacles.

    Amundi narrowly missed out on acquiring Pioneer in 2011 when the eurozone crisis prompted fears that a foreign owner would buy fewer Italian sovereign bonds, but the French asset manager has since revived its interest.

    Mr Mustier is under pressure to sell some of UniCredit’s best assets, including Pioneer, Finevo and Polish bank Pekoa, to shore up a capital ratio which fell to 10.3 per cent at the end of June. Nonetheless senior bankers say the bank shorn of these assets will probably have a significantly lower return on equity.

    Other bidders include some of Europe’s largest asset managers such as Aberdeen Asset Management, Allianz Global Investors, Natixis, Macquarie and Axa, the insurer, according to media reports.

    The deadline for binding offers is in October.

    Additional reporting by Martin Arnold