Italy’s UniCredit revamping operations
(12 November 2015 – Italy) To avoid increasing capital, Italian bank, UniCredit, has indicated that it would cut more than 18,000 jobs in addition to ramping up other cost-cutting measure over the next three years.
The country's largest bank by assets, said it would cut its costs by €1.6 billion (A$2.4 billion) by 2018, mainly via reductions in its commercial banking operations in Austria and Germany. It also gaining control of its Eastern European operations to become a “simpler and more integrated group”.
The Italian lender said it would exit or revamp several underperforming businesses, including its retail banking operations in Austria and its leasing business in Italy, by the end of next year. As part of its revamping, the bank said it would invest €1.2 billion in digital upgrades.
The strategy update followed UniCredit reporting that its profit declined nearly 30 percent to €507 million in Q3, from €722 million in the same period in 2014.
“We aim at these goals in a persistently tough macroeconomic environment, marked by historically low interest rates and decelerating worldwide economic growth,” Federico Ghizzoni, the UniCredit chief executive, said in a news release.
“The plan is rigorous and at the same time ambitious,” he added. “Above all, it is a realistic plan, as it is based on our managerial decisions and it is a totally self-financed plan. Therefore, we are fully confident of its successful execution.”
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