The end of the Profumo affair

21 September 2010 By Nicholas Paisner

Alessandro Profumo, until now one of banking’s great survivors, is set to quit as CEO of Italy’s UniCredit. The government and local shareholders may have had it in for him. But poor performance also made him vulnerable. Still, his disorderly exit reflects badly on the bank.

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UniCredit's chief executive Alessandro Profumo is expected to offer his resignation at a meeting of the bank's board on Sept. 21.

According to a person familiar with the matter, Profumo angered the board and shareholders by encouraging Middle Eastern investors to increase their shareholding in Italy's largest lender without informing the rest of the management team.

Libya's central bank and the country's sovereign wealth fund have a combined stake in UniCredit of around 7.6 percent. Abu Dhabi's Aabar Investments bought a 4.99 percent stake in the bank earlier in 2010.

Italy's market watchdog, CONSOB, and the Bank of Italy have requested clarification on whether the two Libyan investors are independent of each other. The Bank of Italy's rules bar a shareholder from having a voting stake of more than 5 percent.

UniCredit's shares initially fell 4 percent on the morning of Sept. 21. By 1100 GMT they were 0.8 percent lower at 1.925 euros.

Profumo became chief executive of UniCredit in 1997.

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