Andrea Orcel (; born May 14, 1963) is an Italian investment banker who is CEO of UniCredit. He was the president of UBS Investment Bank from November 2014 to September 2018. He was poised to take on the role of Chief Executive of Banco Santander from September 2018 to January 2019; however, the job offer was withdrawn which resulted in him taking legal action against Santander. In December 2021, a judge awarded him €68m in compensation, including €10m for moral damages. Orcel started his own boutique investment bank before taking the role at UniCredit.
Orcel is a controversial figure in European business and international banking. He has been called one of the most successful investment bankers of his generation. Orcel has also been routinely criticized for his abrasive management style, overworking subordinates, and being hyper-competitive.
Early life and education Andrea Orcel was born on May 14, 1963, in Rome, Italy. His father ran a small leasing company and his mother worked for the United Nations. Orcel attended the Lycée français Chateaubriand in Rome for secondary school, at his mother's request, so he could learn French in addition to his native Italian. Orcel attended the University of Rome, Sapienza, majoring in economics and commerce. While a university student, he reportedly skipped class, as attendance was optional, and went backpacking in South America before returning to take his final exams. He has stated that a vacation to the United States when he was 18 convinced him to go into banking. He graduated summa cum laude with an undergraduate thesis on hostile takeovers. He went on to attend the INSEAD business school in Fontainebleau, France.
Career Merrill Lynch
After graduating in 1986, Orcel began his career in fixed income at Midland Montagu in 1987. He moved to Goldman Sachs in 1988 and, after completing his MBA at INSEAD, joined Boston Consulting Group in Paris in 1990, remaining there until 1992. In 1992, he was asked to join Merrill Lynch & Co. in their Financial Institutions Group (FIG) in London. Orcel orchestrated the $25 billion (€21.2 billion) merger of Italian banking groups, Credito Italiano and Unicredito to form banking conglomerate UniCredit in 1998. UniCredito had originally planned to go public but the stock market valuation proposed by bankers at a rival investment bank made UniCredito "unhappy". Orcel called the bank and offered to explore the possibility of a merger with a comparable company and brought them to Merrill Lynch a week later. The merger made UniCredit the largest bank in Italy. The following year, he was the advisor on the $13 billion (€11 billion) merger of Banco Bilbao Vizcaya and Argentaria to create BBVA. BBVA became the second largest bank in Spain after the merger. Orcel was head of the Global FIG team from 2003 to 2007, succeeding Joseph Willit. In 2004, Orcel initiated Spanish bank Santander's acquisition of British bank Abbey National, expanding the bank's operations into the United Kingdom in a deal valued at $15.6 billion (£13.8 billion). He was tapped by the Royal Bank of Scotland Group (RBS) in 2007 to advise on a $55 billion (£49 billion) acquisition of ABN Amro. The deal was orchestrated by Orcel after he brought in Fortis and Santander to execute a three-way consortium bid for ABN Amro. At the time, the bid set a record for the largest merger or acquisition in financial services history. For the acquisition, Merrill Lynch received $12 million (£7.5 million) in advisory fees. Months later, the 2008 financial crisis reduced the capital buffers of banks all over the world, causing major damage to RBS and forcing the UK Government to seize control. The Institutional Investor labeled Orcel "one of the most controversial bankers of the financial crisis".
In November 2008, Orcel's team at Merrill Lynch valued the Italian bank Banca Antonveneta at $10 billion (€9 billion), advising Monte dei Paschi (MPS) to acquire it from Santander for the same amount. Internal valuations of the bank at Santander had Banca Antonveneta valued at $7.4 billion (€6.5 billion). The deal was described as ill-advised and "flawed" as MPS overpaid $2.85 billion (€2.5 billion) for its new acquisition, leaving it with capital deficiencies. During the 2008 financial crisis, Orcel brought in $550 million (€483 million) in advisory fees for the bank, earning him 2007 compensation of $38 million (£33 million). His bonus sparked an investigation into executive compensation by the New York Attorney General; no charges were brought forward against Orcel or Merrill Lynch.
In July 2008, Orcel advised Santander on its $1.6 billion (€1.45 billion) acquisition of Alliance & Leicester, a British bank and former building society. On January 30, 2009, Santander hired Orcel once more to complete their acquisition of Sovereign Bank, in a deal valued at roughly $1.9 billion (€1.4 billion). In 2009, Orcel was asked to serve as the executive chairman of the investment bank, eventually being appointed chief executive of European Card Services. In February 2011, Orcel brokered the $3.3 billion (€2.9 billion) initial public offering (IPO) of a 10% stake of VTB Bank from the Russian government with his brother Riccardo. Orcel led a team to execute an $8.5 billion (€7.5 billion) rights offering for UniCredit, at the height of the Eurozone crisis in January 2012. Recalled as the "scariest [moment] of his career", he broke through Merrill Lynch's risk limits to secure the deal, drawing widespread industry attention. In April 2012, Orcel was tapped by Swiss investment bank UBS CEO Sergio Ermotti to lead their sell side and UK operations. Two of Merrill Lynch's largest corporate clients, UniCredit and Santander, reportedly transferred their business to UBS, following Orcel.
UBS
Following the 2011 UBS rogue trader scandal and a corporate restructuring, Orcel was invited to the group executive board and appointed the co-CEO of the investment banking unit of UBS. In November 2012, he was asked to serve as the CEO of UBS AG–the main private banking unit of UBS Group AG before taking sole control of the investment bank. Upon his acceptance of the position, UBS paid Orcel Sfr6.3 million in cash and awarded him Sfr18.5 million in stock options, for a total sign-on bonus of Sfr25 million (£17 million, $26.2 million, or €23 million). In January 2013, following the Libor scandal, Orcel was called before the British Parliament's banking standards commission to explain the company's role in the scandal. Present for nearly three hours of testimony, he expressed regret for the firm's role and stated to commissioner Andrew Tyrie: "we all got probably too arrogant, too self-convinced that things were correct the way they were. I think the industry needs to change." Later that year he was compensated $26 million, in line with a 7% clawback of the company's bonus pool. Although he was hired in a primarily managerial role, he continued to advise some of the firm's higher profile clients and institutional partners. In March 2013, Orcel rejoined his brother Riccardo to negotiate an investment into VTB from a Qatari sovereign wealth fund. From early 2013 to late 2014 Orcel initiated a corporate restructuring of the investment bank, to "[stop] trying to be the biggest investment bank and [focus] on being the best". With a focus on return-on-investment (ROI), deleveraging, and cost reduction, Orcel increased majority capital positions while diminishing the size of the bank. In May 2015, he was the highest earning executive at UBS Group AG, grossing $8 million in base salary. In June 2016, Orcel offered MPS–a client of his at Merrill Lynch during the 2008 financial crisis–$5.6 billion (€5 billion) in debt and equity when it was facing liquidity issues and was reaching out to a handful of banks. Orcel made this offer to counter a bailout by the Italian government but was jointly rejected by the Italian prime minister Matteo Renzi and MPS. In February 2016, he orchestrated the merger of Vodafone's and Liberty Global's operations in the Netherlands to create a joint venture in a deal worth $1.1 billion (€1 billion).
From 2012 to 2017. Orcel fired thousands of employees in order to boost profitability, reducing the company's wage requirements by $3 billion. He reportedly handed lists of people to fire to managing directors, with many UBS employees learning of their firing as they came to work and "found their access cards no longer worked." In May 2017, he approved a $2.8 billion (€2.6 billion) financing package to Chinese conglomerate HNA Group so they could buy a 10% stake in Deutsche Bank. In August 2018, an Investment Bank trainee accused one of the managing directors of UBS of drugging and sexually assaulting her at a social gathering in September. Orcel personally invited her to his London office to clarify that the director had been suspended and subsequently resigned. Orcel appeared on Bloomberg Markets later that day explaining a revamped infrastructure and process of handling sexual misconduct at the company, noting it must be "completely eradicated". In the months preceding October 2018, Orcel reportedly "lobbied intensely" to be the next CEO of UBS. After giving in to Orcel, UBS put him directly in line to succeed Ermotti.
Santander
In September 2018, Ana Botín announced that Orcel would lead Spanish commercial bank and financial services company Banco Santander as its CEO, starting early 2019. Orcel formally left UBS on September 30, 2018. His appointment to the chief executive made him the first non-Spanish individual to be nominated for such a high-ranking position at the company. Despite being a traditional mergers and acquisitions banker, Orcel expressed interest in staving off banking digitization instead of acquiring more banks or merging with other large banks. As Orcel left UBS, his employment contract included variable remuneration valued at $21.3 million (€18.5 million). Santander agreed to pay Orcel this remuneration as a part of his sign-on bonus on October 19, 2018, if UBS did not pay it.
In January 2019, UBS refused to pay out his deferred stock options, enforcing a "hard-lined" departure policy. This triggered his offer of employment at Santander to absorb the complete cost of those deferred stock options. The total amount Santander had to pay to hire Orcel increased from $21.3 million to more than $50.7 million (€50 million). One estimate had the total cost of Orcel's contract to be as high as $60 million. Santander could only cover a third of that amount.
Orcel was released from his contract and regained his UBS deferred stock options. Industry reaction to the news was mixed with Euromoney stating: "If Santander wanted him, it should have paid for him"; The Economist noted the political backlash Santander would face for hiring Orcel after the 2008–2014 Spanish financial crisis. The Spanish bank offered Orcel capital to start his own investment bank after withdrawing their job offer but he declined. In July 2019, Orcel launched a €100 million ($113 million) breach-of-contract lawsuit against Santander. In December 2021, a court in Madrid ruled that he should be awarded €68m in compensation from Santander. This figure was adjusted in January 2022 to €51.4m of which €18.6m was to be in the form of Santander shares over seven years, plus an additional €10m for moral and reputational damage.
CEO UniCredit On January 27, 2021, the board of UniCredit named Orcel as CEO, taking the place of Jean Pierre Mustier. In April 2021, Orcel became the CEO. During his tenure, UniCredit was highlighted as one of Europe's top-performing banks with significant upside potential according to UBS. Additionally, the bank increased its revenue and capital goals as profits exceeded estimates