UniCredit to cut 14,000 jobs
Italy’s largest bank UniCredit plans to raise €13 billion and axe 14,000 jobs over the next two years as it looks to get its finances in order.
Along with the job cuts, which amount to about 11% of its workforce, UniCredit will shut down about 25% of its 3,800 branches. It also aims to use the record rights issue to remove around €17.7 billion of bad debt from its balance sheet and improve profitability.
The bank’s shares initially decreased today (13 December) before rising to more than 8% on the Milan stock exchange. But its share value has dropped by almost than half this year and UniCredit is looking to raise nearly as much as its market value.
Jean Pierre Mustier, CEO of UniCredit, says it is a “pragmatic plan based on conservative assumptions, with tangible and achievable targets” and these are “decisive actions to deal with our [problem loan] legacy issues”.
Looking ahead, the bank says it wants to get its core capital ratio above 12.5% by 2019, and post net profits of €4.7 billion and resume dividend payments in the same year.