CNN.com - Bipop to replace CEO; profits halve

August 2, 2001 Posted: 0905 GMT

MILAN, Aug 2, (Reuters) - Italian bank Bipop on Thursday confirmed it was replacing its chief executive, as the once high-flying new economy bank struggles to revive its earnings and share price.

Bipop said Maurizio Cozzolini, 41, had been named the bank's new CEO, replacing Bruno Sonzogni, 60.

The bank's board believed Cozzolini, formerly the bank's chief operating officer, was the better man to integrate acquisitions the bank made during its period of rapid growth, said a source close to the bank.

“His job will be to weave together all of the businesses that they have acquired to produce consistent performance at the bottom line,” the source said. “He's a numbers man who can concentrate on the nitty-gritty.” Along with the management shakeup, Bipop announced second-half results which underlined the challenges that Cozzolini faces in restoring investor confidence in the bank.

Bipop said its second-half consolidated net profit plunged 54 percent from a year before to 85 million euros, mainly due to a slump in net commissions due to dismal financial markets.

SHARES WEAKEN Bipop shares were down 0.5 percent at 3.4 euros by 0850 GMT, while the FTSE european banks index added 0.5 percent.

Trained at auditors Arthur Andersen, Cozzolini also held financial positions at Italian industrial conglomerate Montedison before joining Fineco, Bipop's brokerage unit, in 1989.

Sonzogni will remain with the bank overseeing its sales and distribution network.

Still, not everyone was convinced the shakeup was what the doctor ordered for the bank, most of whose troubles relate to the current bear market that has trimmed commissions at its Fineco Internet brokerage, Italy's largest, and its fund management units.

“The reason for the weakness in Bipop is not because Sonzogni is a weak manager,” one London analyst said. “The valuation was way too expensive before.” Bipop, which at one point saw its market value exceed that of the country's leading bank Intesa as well as its leading industrial group Fiat, is now worth less than all but one of Italy's blue-chip banks, with a market value of $5.9 billion.

Consolidated net profit for the second quarter was 41 million euros, slipping nine percent from the first quarter, the bank said in a statement.

Administrative and personnel costs also continued to rise in the quarter.

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