UniCredit: UniCredit Turns to AI to Uncover Smaller M&A Deals in Ambitious Growth Plan -- Financial News

By Paul Clarke Of Financial News UniCredit is using artificial intelligence to uncover smaller M&A deals without the need for hiring extra bankers as the Italian lender has set ambitious target to bolster its business. The bank has been mandated on around 500 deals through a new digital system called DealSync, which enables employees of UniCredit's corporate bank and wealth management unit to feed potential opportunities through to M&A bankers, according to Richard Burton, who leads its client solutions team. The system aims to bolster UniCredit's investment bank by fees from smaller deals without the need to hire more M&A bankers to work on transactions that often yield a relatively small fee. Burton said that around 50 billion euros to 60 billion euros ($54.08 billion to $64.89 billion) of M&A deals in Italy and Germany--the bank's key markets--are done by small and medium sized firms more than half of which are valued at below 50 million euros. "A traditional investment banking model isn't able to serve that client group because the volume and cost are prohibitive, so these companies have to rely on more local and boutique support, limiting the pool of potential counterparties," he said. The bank gets a fee if the platform, which is overseen by an investment banker and specialist technologist, matches buyers and sellers when the deal closes. UniCredit also expects more business from financing the deals. The new tech system is a key part of UniCredit's new three-year plan, which aims to bolster revenue across its client solutions business by 1.4 billion euros by 2027. "They may not always result in a transaction, but it gives us an opportunity," said Burton. "Previously, it was very ad hoc, but now we're able to use the AI to match opportunities in a much more structured way. It has changed the conversations our bankers are having with clients." Burton said that the bank has around 2,000 leads through DealSync and has been given 500 mandates. Most of these deals are currently being done by smaller boutique players rather than international investment banks, he added. The bank has also rolled out a platform called 'Digital Factoring,' which follows a similar model for the SME sector. UniCredit has been looking to diversify its investment bank to gain more prominent roles on M&A and equity capital markets deals. The Italian lender was better known in debt underwriting circles, but it has restructured its teams around sector teams and broken down barriers between its commercial and investment banking arms. Outside of the new technology, Burton said that UniCredit bankers have been increasing the "intensity" of meeting with clients. Its bankers went from around 7,000 meetings with clients three years ago to approximately 32,000 in 2024, he said, and the bank has plans to increase this again. Burton told Financial News previously that it was aiming to become a "European leader in investment banking." "We've added bankers and reorganized our advisory specialists and sector teams so they are supporting bankers in individual countries," said Burton. "What this means is that we are having earlier conversations, we are having more of them and the discussions are more strategic. Even if there isn't an M&A fee, we are at the table earlier, we're leading the financing and grabbing more of the client wallet as opposed to being a second or third tier bank." UniCredit ranked 38th in the EMEA investment banking league tables last year, with a 0.5% market share, according to data provider Dealogic, although much of its focus is in Italy, Germany and Central and Eastern Europe. It finished in 14th place within DCM, 24th in ECM and 37th in M&A in the region. Burton said that the bank is focused on growth. "The last three years have just laid the groundwork for the acceleration of what we're going to do now and it's one of the most exciting times to work at the bank," he said. "We're focused on organic growth and the feedback I'm getting from clients is that we're much more strategically important to them than we were three years ago." Financial News is owned by News Corp, the parent company of The Wall Street Journal and Dow Jones Newswires. Write to Paul Clarke at paul.clarke@dowjones.com Website: www.fnlondon.com (END) Dow Jones Newswires 04-01-25 0434ET By Paul Clarke Of Financial News UniCredit is using artificial intelligence to uncover smaller M&A deals without the need for hiring extra bankers as the Italian lender has set ambitious target to bolster its business. The bank has been mandated on around 500 deals through a new digital system called DealSync, which enables employees of UniCredit's corporate bank and wealth management unit to feed potential opportunities through to M&A bankers, according to Richard Burton, who leads its client solutions team. The system aims to bolster UniCredit's investment bank by fees from smaller deals without the need to hire more M&A bankers to work on transactions that often yield a relatively small fee. Burton said that around 50 billion euros to 60 billion euros ($54.08 billion to $64.89 billion) of M&A deals in Italy and Germany--the bank's key markets--are done by small and medium sized firms more than half of which are valued at below 50 million euros. "A traditional investment banking model isn't able to serve that client group because the volume and cost are prohibitive, so these companies have to rely on more local and boutique support, limiting the pool of potential counterparties," he said. The bank gets a fee if the platform, which is overseen by an investment banker and specialist technologist, matches buyers and sellers when the deal closes. UniCredit also expects more business from financing the deals. The new tech system is a key part of UniCredit's new three-year plan, which aims to bolster revenue across its client solutions business by 1.4 billion euros by 2027. "They may not always result in a transaction, but it gives us an opportunity," said Burton. "Previously, it was very ad hoc, but now we're able to use the AI to match opportunities in a much more structured way. It has changed the conversations our bankers are having with clients." Burton said that the bank has around 2,000 leads through DealSync and has been given 500 mandates. Most of these deals are currently being done by smaller boutique players rather than international investment banks, he added. The bank has also rolled out a platform called 'Digital Factoring,' which follows a similar model for the SME sector. UniCredit has been looking to diversify its investment bank to gain more prominent roles on M&A and equity capital markets deals. The Italian lender was better known in debt underwriting circles, but it has restructured its teams around sector teams and broken down barriers between its commercial and investment banking arms. Outside of the new technology, Burton said that UniCredit bankers have been increasing the "intensity" of meeting with clients. Its bankers went from around 7,000 meetings with clients three years ago to approximately 32,000 in 2024, he said, and the bank has plans to increase this again. Burton told Financial News previously that it was aiming to become a "European leader in investment banking." "We've added bankers and reorganized our advisory specialists and sector teams so they are supporting bankers in individual countries," said Burton. "What this means is that we are having earlier conversations, we are having more of them and the discussions are more strategic. Even if there isn't an M&A fee, we are at the table earlier, we're leading the financing and grabbing more of the client wallet as opposed to being a second or third tier bank." UniCredit ranked 38th in the EMEA investment banking league tables last year, with a 0.5% market share, according to data provider Dealogic, although much of its focus is in Italy, Germany and Central and Eastern Europe. It finished in 14th place within DCM, 24th in ECM and 37th in M&A in the region. Burton said that the bank is focused on growth. "The last three years have just laid the groundwork for the acceleration of what we're going to do now and it's one of the most exciting times to work at the bank," he said. "We're focused on organic growth and the feedback I'm getting from clients is that we're much more strategically important to them than we were three years ago." Financial News is owned by News Corp, the parent company of The Wall Street Journal and Dow Jones Newswires. Write to Paul Clarke at paul.clarke@dowjones.com Website: www.fnlondon.com (END) Dow Jones Newswires 04-01-25 0434ET