UniCredit

UniCredit privately bagged an extra €500m of additional tier one capital this week, ahead of an ambitious plan to bulk up its common equity and clean up its balance sheet.

While UniCredit’s CEO has rallied his troops round a simple vision that should be easy to execute, the success of the corporate and investment bank will come down to greater collaboration across countries and divisions, writes David Rothnie.

National Bank of Abu Dhabi signed a $2bn three year loan on Tuesday, cementing the bank group for its $175bn merger with First Gulf Bank, though some key European banks turned down a role on the deal.

With the Christmas holidays fast approaching, equity capital markets are demonstrating that the first quarter of 2017 is likely to be busy, with two significant rights issues announced in the past few days.

UniCredit's €13bn rights issue, which won rousing applause from investors on Tuesday when the share price rose 16% on its announcement, will be one of the centrepieces of what is likely to be a busier year for financial institutions ECM in 2017.

Mark Twain supposedly said: “I’m great at quitting smoking. I’ve done it a thousand times.” One could say much the same about UniCredit and new strategic plans, though this time, perhaps it’ll stub out the filthiest parts of its loan book for good.

UniCredit will not be one of the Basel IV ‘outliers’ that will have to substantially increase its capital levels when the new rules come in, according to chief executive Jean-Pierre Mustier, speaking at the launch of the bank’s new strategic plan on Tuesday morning.

UniCredit announced this evening a set of capital requirements given it by the European Central Bank. Tomorrow it will hold a capital markets day in London at which Jean-Pierre Mustier, who took over as its CEO in July, will announce his strategy, including towards the bank’s capital position.

Amundi’s shares closed at a record high on Monday, up 5.4%, after it announced it would use a €1.4bn rights issue and €600m of senior and subordinated debt to buy Pioneer Investments from UniCredit.

UniCredit turned to the equity-linked bond market on Thursday to dispose of its last 7.4% stake in Bank Pekao, after agreeing to sell 32.8% of the Polish lender to insurance company Powszechny Zakład Ubezpieczeń and the Polish Development Fund, for Z10.6bn (€2.4bn).

Equity-linked bond bankers are looking forward to a lively year for issuance in Emea in 2017, as they believe market conditions will favour the product and a wide variety of issuers will find it useful.

Deutsche Bank’s Spanish subsidiary kept its commitment to issue around €2bn of Cédulas a year and on Wednesday launched a well-oversubscribed €1bn five year, even though the cost was much higher than the European Central Bank’s Targeted Long Term Refinancing Operation.