Copying and distributing are prohibited without permission of the publisher.

Watermark

A bolt from the blue

pexels free image lightning 575x375
By Richard Metcalf
14 May 2021

Bankers woke up on May 12 to find themselves in a changed world, quickly realising they would need to adapt to a new set of circumstances.

No, not the capital markets bankers who are suddenly dealing with higher than expected US inflation figures, but the senior figures at UniCredit who finally found out what CEO Andrea Orcel had in store for them.

The changes at the top of the Italian lender came suddenly and unexpectedly, according to sources at the bank. Those tasked with communicating the firm’s strategy to the outside world claimed that even they did not know who had survived the chop and who had not.

While the dust that this kicked up still lingers, the elimination of a layer of management overseeing the whole of the bank's western Europe business seems to suggest that former regional co-heads Olivier Khayat and Francesco Giordano are out, though this could not be confirmed. No alternative roles were announced for them. Also conspicuously absent from the bank’s statement was former co-chief operating officer Carlo Vivaldi.

On the other hand, the corporate and investment banking division, led by Richard Burton, appears to have been left relatively untouched.

Inflation

The uncertainty surrounding the fates of some of the UniCredit bankers seems to mirror the ambiguous reaction of the capital markets to the inflation figures that were released on the same day, and the volatility that they unleashed.

“The problem is there is a breakdown between the bond market telling us that inflation is a transitory feature and the equity markets telling us it's structural,” an equities investor told GlobalCapital this week. “One market is right, we just don’t know which one it is.”

The one thing that does seem certain is that issuers in all markets will have to pick their moments from now on.

“We are moving into a window-based market,” said a FIG syndicate manager. “You cannot avoid it.”

The great debate

Meanwhile, in  the SSA market, the debate over syndication fees rages on, with some bankers suggesting the EU should have opted for a cap instead of opening Pandora’s box by tinkering with fee grids. Some banks are threatening to pull out of the business entirely if other issuers follow the EU’s lead.

To help make sense of the arguments for and against lowering underwriting fees, GlobalCapital has followed the example of Boris Johnson by producing two opposing opinion pieces on the topic. Unlike the UK prime minister, however, we have made both of them public so that readers can make up their own minds as to the merits of each case.

Bart departs

The SSA market will be bidding farewell to one of its most highly regarded funding officials at the beginning of next year, when Bank Nederlandse Gemeenten’s Bart Van Dooren retires after 29 years with the agency.

On the sell-side, meanwhile, Crédit Agricole has filled several senior DCM roles. Cécile Bidet replaces Christian Haller as head of global FIG DCM in London, while Xavier Beurtheret moves into a newly created position in Paris as head of corporate DCM for Europe.

Finally, BNP Paribas has made further additions to its expanding EMEA ECM business, hiring Christoph Heuer from Goldman Sachs for Northern Europe and Deepak Sran from UBS for syndicate.

By Richard Metcalf
14 May 2021