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AND THE WINNER IS...

UniCredit CEO Alessandro Profumo, European Business Leader of the Year

RICHARD LOFTHOUSE meets UniCredit CEO Alessandro Profumo, winner of the CNBC European Business Leader of the Year award

As CNBC European Business Leader of 2007, chief executive of Milan-based UniCredit Group Alessandro Profumo embodies a rare combination of talent as manager, capitalist, European visionary and, perhaps above all, entrepreneur. The combination of these elements is elusive among even topflight managers, particularly in Italian banking – but then, Profumo is not your average Italian banker.

While Italy’s heavily fragmented banking sector consolidated, Profumo built a world-beating giant. In 2005, he drove through Europe’s largest cross-border bank deal ever, acquiring Germany’s HypoVereinsbank (HVB) in a deal worth €15.4bn.

The strategic achievement of the merger was to acquire, via HVB, control of Bank Austria Creditanstalt, which had built strong positions across eastern Europe. At a single stroke, Profumo had achieved a top banking presence in Croatia, Bulgaria, Poland and Bosnia, with considerable strength also in Turkey, Slovakia, the Czech Republic and Romania.

Formerly known as Credito Italiano, UniCredit was itself the result of Profumo’s leadership. Just months after being appointed CEO in April 1997, he drove the first major wave of consolidation in Italy, merging six regional banks in northern Italy to produce a springboard for larger, pan-European deals.

“We have to create a single market or we cannot compete,” Profumo says. His mantra consists of championing – like CNBC European Business – cross-border entrepreneurship, mergers and commerce. Behind this ethos lies a positive view of globalisation (“it means doing better”) tempered by the conviction that unless Europe grows into its ever-expanding skin it will never compete against the emerging giants of Asia and Latin America.

Profumo’s strategic view of the globe was encapsulated in his recent announcement that UniCredit had signed a memorandum of understanding with Bank of Baroda to kick-start an asset management joint venture in India. In passing, Profumo ruled out commercial initiatives in the US and China, citing market maturity and risk respectively. He added that Europe remains UniCredit’s “reference market”, and that the group is increasingly interested in countries where it is already present, “like Germany, and to a lesser extent Italy”. UniCredit also has plans to strengthen its position in Turkey, Russia and Ukraine.

The statement keeps virtually any sequence of options open, displaying entrepreneurial flare where opportunities present themselves and sufficient intrigue to combat the rumour mill inside Italy.

The McKinseyite in Profumo – he worked for the famous consultancy company in the late 1980s – manifests itself as strategic clarity that rises above local squabbling. He denied late last year that UniCredit wanted to buy Banca Popolare di Milano, while staying aloof on the internecine strife that has enveloped Rome-based bank Capitalia. In other words, old habits still die hard in Italian banking.

Cesare Geronzi, Capitalia’s septuagenarian chairman, was recently reinstated after being suspended over criminal proceedings related to the bankruptcy of a property company. Despite further legal challenges anticipated later this year relating to Parmalat, Geronzi is trying to consolidate his power base in the bank by ousting his youthful chief executive Matteo Arpe in what has been compared to a fight to the death reminiscent more of Roman gladiators in the Colosseum than market-driven capitalism.

Arpe is favoured by the markets, while Geronzi has drawn in foreigners like Spain’s Banco Santander and Frenchman Vincent Bolloré to stoke his own position. Arpe has compared the move to Ludovico Sforza, the 16th-century Milanese prince who turned to the French to defeat domestic rivals only for his actions to lead to his downfall and disgrace.

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