The CEO of UniCredit says a US probe for alleged sanctions violations involves far fewer transactions than at checks on other banks. The bank also announced senior management changes and interim results.

UniCredit, which announced management changes and a rise in profits this week, is the subject of a US investigation for suspected sanctions-busting, but this involves far fewer transactions than at probes of other banks, its chief executive is reported to have said.

Bloomberg quoted chief executive Federico Ghizzoni on the US probe, talking after quarterly and half-year figures were issued this week. The bank also announced senior manager changes, including to its compliance management.  

Shareholders of non-US banks face the risk that a number of them could be punished and fined by the US if sanctions against regimes such as Iran and Sudan are found to have been violated. Last month, the US Department of Justice punished BNP Paribas for the matter, imposing a record $8.97 billion fine and temporarily banning the bank from making dollar-linked transactions. The issue has led to calls in France for US punishments to be raised later this year at a G20 meeting in Australia. There have been concerns that the US punishments are unjustly harsh and a sign of how the country is using its powers in an extra-territorial way.

Various media reports have said that Credit Agricole; Societe Generale; Deutsche Bank and Commerzbank AG are also under scrutiny from state and federal authorities including the US Department of Justice.

The UniCredit case involves volumes “far lower than what we have seen with many other banks”, Ghizzoni is quoted as telling Bloomberg Television. “We feel absolutely fine because we don’t have anything to fear, at least so far,” Ghizzoni said.

Since the investigation began three years ago, “we’ve had a number of meetings, providing all documentation needed,” Ghizzoni is quoted as saying. He described the cooperation as “very open” and “transparent". "We don’t have signals positive or negative, the cooperation on the case is really excellent and we are very proactive in providing information. This is the only case we are dealing with,” he said.

This publication has contacted UniCredit seeking additional comment; it had not responded at the time of going to press.

Management changes

Separately, UniCredit has announced some management changes.

Jean Pierre Mustier has decided to step down from his position as deputy general manager in charge of corporate and investment banking and of the supervision of the group's German activities as of 1 January, 2015. He will be succeeded by Gianni Franco Papa, currently head of the group's Central & Eastern Europe (CEE) division.

Mustier will remain involved in the group as early next year he will join the UniCredit international advisory board as a non-executive director. He will also take on an external role focused on the financing of the real economy, through debt and equity, as well as pursue his pro bono financing of social entrepreneurs and education projects.

Nadine Faruque has decided to accept a new professional challenge in another international financial institution, thus leaving her position as general counsel and group compliance officer in charge of legal affairs and compliance on 30 November.

The firm has decided to split Faruque's role in two and appointed Carlo Appetiti as group compliance officer, starting from 1 December, reporting directly to the CEO. In addition, the group legal activities will be managed by two co-heads: Carlo Kostka and Gianpaolo Alessandro, both reporting to the group COO and  deputy general manager Mr Fiorentino.

Results

UniCredit said it has logged “another strong quarterly performance” with second-quarter net profit of €403 million ($538.3 million), leading to a first-half net profit of €1.1 billion.

Adjusted for the revised tax charge on the valuation of the stake in Banca d'Italia, net profit for the quarter and half-year were €618 million and over €1.3 billion respectively.

The “core bank” logged a net profit of €1.0 billion in the second quarter, reaching €2.0 billion in the first half of the year, up 7.1 per cent on the previous six months.

The bank said all divisions positively contributed to core bank's results, including asset management.