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Generali has appointed JPMorgan and Mediobanca to find a buyer for BSI, the Swiss private banking unit of Italy’s largest insurer by assets, according to two people familiar with the situation.
The move to sound out a potential more than $1bn sale comes just weeks before Mario Greco takes over as chief executive of Generali on August 1.
With Mr Greco’s arrival imminent it is unlikely any decisions will be taken before he has had a chance to review eventual offers, according to one of the people.
If the new chief executive carries through on the sale of BSI, it would the first indication that he aims to focus on Generali’s insurance business and dispose of peripheral assets to help stave off the need to ask investors for new funds. Such a move is something some analysts have said will be necessary in the next year.
Mr Greco is taking over from Giovanni Perissinotto, who after 32 years at Generali, including the past 11 as chief executive, was ousted by the board for failing to find a remedy for a falling share price and sagging earnings.
Generali’s shares have risen 23 per cent since news first leaked of the board’s move against Mr Perissinotto in part on the hope that Mr Greco, formerly head of general insurance at Zurich Insurance Group, can lead a turnround.
Net profit halved last year as Generali took steep writedowns on Greek government bonds.
Mediobanca, the Milanese investment bank that owns about 13 per cent of Generali making it the insurer’s largest shareholder, has often been called to work on Generali’s deals.
JPMorgan four years ago helped insurer Swiss Life
to sell private bank
Banca del Gottardo to BSI in a SFr1.875bn deal.
The transaction turned BSI into the dominant private bank in Switzerland’s Italian-speaking Ticino region, with client assets of SFr78bn in the past year.
BSI, which began 139 years ago as Banca della Svizzera Italiana, is based in Lugano and focuses on wealthy north Italian clients.
The private banking group has recently been grappling with lower profitability. Its net group profit of SFr58m in the past year was 2 per cent higher than in the year before but well below the level of SFr100m in 2008 and 2009.
Moody’s, the rating agency, last week downgraded the bank’s long-term deposit ratings to A2 from A1, citing “ongoing pressure on profitability and efficiency resulting from the adverse competitive and macroeconomic conditions”.
It warned that a potential sale would prompt another reassessment, as one notch of the private bank’s rating derived from the parental support of Generali, which bought BSI 14 years ago.
Generali and JPMorgan declined to comment.