Andrea Orcel, CEO of UniCredit.
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One top bank executive pointed to the possible divergence in the fortunes of the financial sector in each Europe and the US, suggesting that further bailouts of US regional lenders are likely.
“The United States is about bailing out troubled banks, I do not see any distressed bank being bailed out in Europe,” Andrea Orcel, CEO of UniCredit, told CNBC’s Joumann Bercetche.
“I feel in the United States, judging by yesterday, there could also be more.”
JPMorgan on Monday seized the overwhelming majority of First Republic assets, including roughly $92 billion in deposits. The seizure of the First Republic followed the collapse of the Silicon Valley Bank and general concern over the stability of smaller American banks in the face of higher Federal Reserve rates of interest. Top economists told CNBC that further rate hikes could reveal more vulnerabilities in the US banking sector.
But the banking authorities in the European Union where Italian UniCredit relies, have repeatedly said that they don’t see the same level of risk in the region, arguing that European banks are well capitalized and more heavily regulated.
![President of UniCredit: Positive macroeconomic environment and continuation of transformation improving results](https://image.cnbcfm.com/api/v1/image/107234527-16830976471683097643-29283941266-1080pnbcnews.jpg?v=1683097927&w=750&h=422&vtcrop=y)
In addition they emphasized that the intervention of O UBS to purchase and save Credit Suisse happened outside the European Union, in Swizterland.
“You may see more of these [rescues] in the US, for my part, but in Europe, such acquisitions won’t be a driving force for consolidation,” Orcel told CNBC.
He added that after the Covid-19 pandemic and the Russian invasion of Ukraine, volatility is now the biggest threat to the outlook.
The comments from the head of UniCredit come after the Italian lender presented its latest results on Wednesday. First-quarter net profit was €2.06 billion ($2.27 billion) in the first quarter, up greater than 41% from the previous quarter. The bank also recorded the CET 1 capital ratio, which is a measure of the bank’s solvency, at the level of 16.05% for the quarter.
UniCredit shares rose about 5% on Wednesday after the results.