MILAN (Reuters) - The chief executive of Banca Carige (CRGI.MI) has pledged to stay in his job for as long as the Italian bank’s board backs him, following a boardroom spat that risks undermining the lender’s turnaround efforts.
The row became public on Tuesday when Chairman Giuseppe Tesauro stepped down over disagreements on the bank’s governance and management, followed on Wednesday by independent director Stefano Lunardi, who cited similar reasons.
The Genoa-based bank has long been dogged by governance issues and investment bankers say concerns over potential shareholder conflicts complicate its search for a merger partner.
After losing its second CEO in little more than a year, Carige hired Fiorentino in July 2017 to oversee a balance-sheet clean-up. A former UniCredit banker, Fiorentino pulled off a capital increase in December to stave off the risk that the bank could be wound down.
“I was named by the board and I’ll go on doing my job as long as I have the board’s support,” he told Reuters in a phone interview.
Carige swung back to profit in the first quarter of 2018 for the first time in five years helped by lower loan losses.
“Tesauro had no executive powers, so we will go on with our plan which aims to make the bank’s business model sustainable,” said Fiorentino, who has been cutting costs and selling assets.
“We’re cleaning up the bank’s balance sheet ... it is our professional obsession and we’ll keep at it with our usual tenacity.”
Shares in Carige were down 2.5 percent at 1356 GMT, underperforming a 1 percent sector drop .FTIT8300, hurt by concerns about management stability.
Fiorentino said he spoke frequently with Vittorio Malacalza, who is Carige’s deputy chairman as well as the top shareholder with a stake of 20.6 percent after backing two successive cash calls in the past three years. Back in 2016, Malacalza supported Tesauro’s appointment.
“There is an active relationship (with Malacalza) both within the board and in private meetings,” Fiorentino said.
Exactly a year ago, Malacalza pushed through a no-confidence motion in Fiorentino’s predecessor Guido Bastianini. At the annual general meeting in March, Malacalza criticized Fiorentino over the handling of the December capital increase, prompting another prominent investor to defend the CEO.
Italian financier Raffaele Mincione, who emerged this year as one of Carige’s leading shareholders with a 5.4 percent holding but failed to attain a board seat, said he felt compelled to back Fiorentino in the face of Malacalza’s comments.
Malacalza declined to comment on the latest developments at Carige.
Fiorentino rebutted criticism by Tesauro who, in press remarks published on Wednesday, accused the CEO of making his job almost impossible by keeping him in the dark about decisions.
“All of the many decisions that have been taken over the past year have gone through the board and on some key moves there have multiple board discussions,” Fiorentino said.
“We’ve also introduced preparatory board meetings ahead of the actual approval of given measures.”
Additional reporting by Valentina Za and Andrea Mandala; Editing by Mark Bendeich and Mark Potter