Financial services group UniCredit has approved sweeping changes, including the creation of a new post of country chairman for Italy, following a power struggle at the head of the firm.

Italian financial services group UniCredit, at a board meeting yesterday, approved a major reorganisation and the creation of the new post of country chairman for Italy.

The moves are seen as the outcome of a power struggle between ambitious chief executive Alessandro Profumo and the shareholders of the regional Italian banks that have been combined to form the UniCredit group.

The reorganisation involves the merger of seven subsidiary banks (UniCredit Private Banking, UniCredit Family Financing Bank, UniCredit Banca, UniCredit Banca di Roma, Banco di Sicilia, UniCredit Corporate Banking, UniCredit Bancassurance Management and Administration) with the parent company, UniCredit.

It is hoped the project will simplify the group structure while safeguarding the most important brands (UniCredit Banca, UniCredit Banca di Roma, Banco di Sicilia).

Dieter Rampl, chairman of UniCredit, said: "We believe that combining the specialisation of our businesses with our strong geographical roots is the key strength of any international corporation”.

As country chairman for Italy Gabriele Piccini, currently CEO of UniCredit Banca and head of Italy retail network, will report to deputy CEO Roberto Nicastro. This will be effective from 1 November, when the new set-up becomes operational.

Puccini’s role will be similar to the structure that currently exists in Austria, Germany and Poland. He will act as a point of reference for the group’s activities in the Italian market and to coordinate its territorial strategies. He will have co-responsibility for the business results together with the Italian network heads.

The country chairmen of Germany and Austria will report to deputy CEO Sergio Ermotti, while those of the CEE-countries will report to Federico Ghizzoni, head of CEE banking operations.

The project, designed under the leadership of yet another deputy CEO, Paolo Fiorentino, will create four specialised business segments in Italy, Austria and Germany.

These are families, dedicated to private customers with assets up to €500,000 (just under $700,000); private banking, for customers with assets above €500,000; SMEs, for companies with yearly turnover up to €50 million; and corporate banking, for companies with yearly turnover over €50 million.

Group CEO Profumo had reportedly threatened to resign last month in a stand-off with chairman Rampl and shareholder representatives if the project had not been approved.