February 6, 2020 / 12:52 PM / 20 days ago

UPDATE 2-Mediobanca to change rules to let outsiders in as CEO

(Recasts headline and lead)

By Gianluca Semeraro

MILAN, Feb 6 (Reuters) - Mediobanca wants its governance rules to be brought more into line with market standards to allow an outsider to become chief executive, the Italian investment bank’s boss said on Thursday.

Mediobanca’s current corporate governance rules state that the CEO must be chosen from managers who have been with the bank for at least three years.

The move comes after billionaire businessman Leonardo Del Vecchio built a stake of just under 10% in Mediobanca to become its main shareholder.

The rule preventing outsiders becoming CEO was introduced in 2007 when the two founders of the merchant bank, UniCredit and Capitalia, merged and sought to preserve the managements’ independence.

But since then UniCredit has gradually cut its holding and in November sold its remaining stake.

“The situation has changed. So we can go back to the bylaws as they were before (the merger of UniCredit and Capitalia)”, Mediobanca CEO Alberto Nagel told an analyst conference call.

Mediobanca’s shareholding structure has changed substantially in recent months with the arrival of Del Vecchio.

A source familiar with the situation said in October Del Vecchio, the founder of eyewear maker Luxottica, wanted to change Mediobanca governance to make sure he had a say in the choice of the next chief executive.

The mandate of Nagel, who has been CEO since 2008, comes up for renewal later this year.

Del Vecchio has criticised Nagel’s strategy which he claims relies too heavily on consumer finance and income from the bank’s 13% stake in Italian insurer Generali, urging the bank to return to its roots in investment banking. .

Mediobanca’s results show that Nagel’s strategy could be bearing fruit.

The bank reported a stronger-than-expected net profit for the six months to the end of December as wealth management fees boosted revenues and margins in consumer business proved resilient.

The wealth management business “was a growth driver and the top group contributor to fees,” the bank said in a statement.

Net profit came in at 468 million euros ($514.75 million), up 4% from a year ago, beating a consensus compiled by the bank of 446 million euros.

$1 = 0.9092 euros editing by Stephen Jewkes and Jane Merriman

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