* Shareholder wants stronger GM, foundation coalitions
* Calls seen as pre-campaign for management jobs
* Bank chairman: we already have a strong GM
By Ian Simpson
MILAN, Oct 20 (Reuters) - The top shareholder in Intesa Sanpaolo SpA has said the bank's general manager should have more power, in a sign that hurt feelings continue in Turin over the 2007 merger that created Italy's biggest retail bank.
Angelo Benessia, chairman of Turin foundation Compagnia di San Paolo, which has a 10 percent share in Intesa Sanpaolo, also called on other non-profit foundation shareholders to form temporary coalitions to deal with issues.
Turin leaders have been been fuming over the city's loss of clout since Milan-based Banca Intesa's takeover of Turin's Sanpaolo IMI to form Intesa Sanpaolo. They have said they want governance to be equally balanced between Milan and Turin shareholders.
Turin mayor Turin Mayor Sergio Chiamparino told Reuters last week that a more powerful general manager, would mean a stronger retail unit, which he heads. This would translate more lending to small and mid-sized businesses around Turin and in the rest of Italy, which is suffering its worst downturn since World War Two, he said.
It is the first sign of political manoeuvring ahead of the expiration of management mandates, including that of Chief Executive Corrado Passera, next spring.
"These comments by Benessia are part of the pre-election campaign for the supervisory and management boards," said an analyst who spoke on condition of anonymity. "This is more about politics than business."
When asked if the bank needed a general manager with strong powers, Management Board Chairman Enrico Salza told reporters in Rome: "We already have one."
The management issue has heightened since General Manager Pietro Modiano, who had headed Sanpaolo IMI, quit in November 2008. He left because of reported tensions with Passera, the former Intesa CEO, over a restructuring of the 5,400-branch retail division Modiano headed.
Intesa Sanpaolo is now headed by General Manager Francesco Micheli, a Banca Intesa veteran.
INFORMAL COALITIONS
Turin Mayor Chiamparino said last week that the general manager should have more authority.
"As far as I'm concerned, (there should be) at least an autonomous general manager with definite powers," he said.
Benessia, in an address to Compagnia di San Paolo over the weekend that was published on its website, said that foundation shareholders should form informal coalitions for one-off events, such as the election of bank boards.
Italian non-profits, including Compagnia di San Paolo, hold about 26 percent of Intesa Sanpaolo shares.
Benessia's comments come as Intesa Sanpaolo, Europe's fourth-biggest bank by market value, is looking to shore up its capital ratios by listing, selling or carry out partnerships for about 11 billion euros ($16 billion) in non-core assets.
"It's reasonable to expect that institutional investors will be called on more and more to make use of the tools given them by statute," Benessia said.
As part of its capital-increase plans, Intesa Sanpaolo has reopened talks to sell its depositary bank to State Street Corp , Il Messaggero newspaper reported on Tuesday without citing sources.
The Italian bank has put its price for the unit at about 1.8 billion euros, it said.
Asked about the report, Passera told reporters in Rome: "The talks are going forward." He gave no details.
Shares in Intesa Sanpaolo ended the day down 0.08 percent at 3.16 euros, almost in line with the DJ Stoxx banks index. ($1=.6678 Euro) (Additional reporting by Stefano Bernabei in Rome; editing by Karen Foster)