UniCredit SpA Chief Executive Officer Andrea Orcel drastically reduced the ranks of top management and cut back on co-head structures to simplify decision-making as part of his first major changes since taking over.
In a bid to increase accountability, Orcel set up a new group executive committee of 15 members to replace the previous 27-member body, the Milan-based lender said in a statement on Tuesday.
Italy, Germany, central Europe and eastern Europe will now form geographic areas directly reporting to the CEO, while the corporate and investment banking division will serve all regions.
As part of the organizational changes, Orcel removed the co-head system implemented by predecessor Jean Pierre Mustier, appointing Niccolo Ubertalli as head of Italy and Ranieri de Marchis as group operating officer.
Stefano Porro will remain in his role as CFO, Richard Burton stays on as head of corporate and investment banking, and risk will continue to be led by TJ Lim. A newly created digital division will be headed by Jingle Pang.
“When I began as CEO of UniCredit, I promised that one of my first priorities would be to reduce complexity and simplify UniCredit’s structure,” Orcel said in a statement, pointing to moves for “streamlining our business, clarifying key roles, and improving accountability.”
Orcel has been tasked with laying out a growth strategy after doubts over the bank’s direction led to the exit of Mustier, who had cleaned up the bank and made it leaner.
UniCredit earlier this month joined European peers in posting stronger-than-expected first quarter results amid a surge in trading and lower provisions for bad loans.
The changes mean fewer staff will report directly to Orcel. Among them, former co-CEO of western Europe Olivier Khayat, ex-head of finance and control Wouter Devriendt and former co-Chief Operating Officer Carlo Vivaldi. He’d been named by people with knowledge of the matter as an internal candidate to replace Mustier.
“We see this announcement as positive,” Citigroup analyst Azzurra Guelfi said in a note. “We see positive momentum in the shares.”
UniCredit rose as much as 1.2% in Milan on Wednesday, giving the bank a market value of 22.4 billion euros ($27.2 billion).
(Updates with strategy from fifth paragraph.)