© Reuters. FILE PHOTO: Andrea Orcel, then UBS chief executive, leaves after attending a UK parliamentary inquiry into Libor interest rates in London January 9, 2013. REUTERS/Olivia Harris
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MILAN (Reuters) -UniCredit (MI:CRDI) Chief Executive Andrea Orcel said on Monday he would be “definitely up for more,” when asked about whether he would seek a new mandate at the helm of the Italian bank.
The former UBS investment banking chief started in April 2021, and in December that year he presented his ‘UniCredit Unlocked’ strategy for Italy’s only lender regulators deem of global relevance. He comes up for renewal in spring 2024.
“I love my job, I love UniCredit,” he told a Bloomberg conference in Milan, adding he thought his work at the Italian bank was not done.
“UniCredit Unlocked has a lot further to go, if investors and shareholders will vote me I’m definitely up for more,” he added.
Orcel said UniCredit was investing heavily to strengthen income from fee-yielding businesses, so as to reduce its still excessive reliance on net interest income (NII) – the gap from rates charged on loans and those paid to raise funds.
Like other European banks that quickly raised the cost of credit for customers as official rates rose, while failing to adjust returns for depositors, UniCredit has reaped record profits in recent quarters thanks to the NII boost.
“We can price our deposits better because there is a flight to quality,” he said.
However, the situation has started changing in the second quarter as higher rates have filtered through to depositors.
“The so called ‘pass through’ will increase and that will create a headwind for banks,” Orcel said.
To prepare for the challenges ahead, which are likely to include a rise in troubled loans from the second half of next year, UniCredit is focused on cutting costs, Orcel said, a task made more difficult by high inflation.
“With the fees, the costs, we feel our gross operating margin will continue growing … We’re relatively confident that next year we will at least be in line with this year.”