Abu Dhabi fund cuts stake in Italy's UniCredit bank

Abu Dhabi sovereign wealth fund Mubadala more than halved its shareholding in Italian bank UniCredit as the holder of about 6% of the world’s oil reserves sells stakes in overseas assets.

Abu Dhabi fund cuts stake in Italy's UniCredit bank

Abu Dhabi sovereign wealth fund Mubadala more than halved its shareholding in Italian bank UniCredit as the holder of about 6% of the world’s oil reserves sells stakes in overseas assets.

The fund’s stake declined to about just over 2% as of December 20, according to a filing by the Italian market regulator, down from a 4.99% stake in June, Consob said in a statement.

The stake sold by the fund is valued about €850m based on a closing share price.

Representatives for Mubadala and UniCredit declined to comment.

Abu Dhabi’s fund bought the stake in 2010 as part of its strategy to diversify investments from the emirate’s oil-based economy.

At the time, the holding was valued at about €1.8bn.

The fund, started as a means of diversifying the economy by attracting expertise and jobs to the emirate, is now a global investing powerhouse.

The fund has invested in Greek fish farming, Europe’s biggest electric-scooter-sharing company, and a Canadian data centre.

Mubadala has been caught up in a series of investigations over the Malaysian government’s scandal-ridden 1 Malysia Development.

In 2017, Mubadala committed $15bn (€13.4bn) to SoftBank Group’s $100bn Vision Fund and its monitoring its performance before deciding whether to sign up for the second round, according to chief executive officer Khaldoon Al Mubarak.

The fund cut its stake move happened less than one month after UniCredit chief executive Jean Pierre Mustier announced new business strategy.

The strategy was aimed at rewarding investors through 2023 through share buybacks and dividends totaling €8bn.

Mustier is seeking to drive investor returns while signaling that the bank -- in common with many of its peers -- is struggling to boost growth in a time of negative interest rates.

Revenue and costs are expected to be little changed through 2023 and the bank will focus on eking out what it can on its own rather than attempting major acquisitions.

UniCredit’s main investors are Black Rock and Dodge and Cox with about 5% stake each, according to the bank’s website.

The bank’s shares have gained 28% in the last 12 months, compared with a 6% increase by the Stoxx 600 Banks Index.

Sovereign wealth funds own about 10.5% of UniCredit, while 65% is held by institutional investors, 5% by Italian banking foundations and 13% by retail investors, bank’s website shows.

- Bloomberg

More in this section

Lunchtime News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up