The head of Italy’s biggest bank, Unicredit, was fired from his job following a row over controversial Libyan business connections he had promoted.
Alessandro Profumo, who led Unicredit since 1997 and built up the bank into a major European player through a massive acquisition program, stepped down after a four-hour emergency board meeting on Tuesday.
The board has “taken the position ... that the time for a change of the head of the group has come,” a statement said.
“Alessandro Profumo therefore handed in his resignation,” it said.
It said Unicredit chairman Dieter Rampl would take charge until a replacement was found “in the coming weeks.”
Unicredit is one of the biggest banks in Europe. It has a market capitalization of 37.3 billion euros (US$49.6 billion) and about 162,000 employees in 22 countries. Shareholders include several Italian bank foundations, German insurance giant Allianz and the Aabar Fund from Abu Dhabi, as well as Libya.
Profumo’s resignation capped a dramatic day as he was taken to task by Unicredit’s main shareholders for allowing Libya, a former Italian colony, to build a 7.5 percent stake in the bank without informing them.
Last month, Libya granted Unicredit an operating license — believed to be the only such deal with a foreign bank in the key North African oil and gas producer — as it increased its holding.
Reports said Unicredit’s traditional shareholders and Rampl could not forgive Profumo for his handling of the relationship with Libya, now a partner for the West but not so long ago a pariah state accused of sponsoring terrorism.
“There was a demand made by the board of directors and he resigned,” Profumo’s wife, Sabina Ratti, was quoted as saying late on Tuesday by the news agencies Ansa and Radiocor.
Profumo was chief executive from 1997 and orchestrated a major expansion drive by the bank, particularly into central and eastern Europe. In 2005, the bank merged with German lender HVB, which was led at the time by Rampl. He is also president of the European Banking Federation in Brussels.
Profumo could get a severance package of 40 million euros, the Ansa news agency said, but the bank did not confirm the figure.
The stakes in Unicredit held by the Libyan central bank and the Libyan Investment Authority have risen this year to more than 7.5 percent, making Tripoli the largest single shareholder in the bank.
Tensions were already simmering because of the bank’s poor earnings, with net profit last year plunging 57.6 percent to 1.7 billion euros while this year it has continued to struggle.
Early last month, Uncredit said it was planning 4,700 job cuts in Italy from next year to 2013 as it reorganized its business, according to union sources.
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