Italy’s UniCredit axes 14,000 jobs and seeks £11 billion for debt fight
Italy's biggest bank is cutting 14,000 jobs — one in 10 staff — and raising £10.9 billion from investors as it battles bad debts.
UniCredit hopes the record rights issue can be used to offset most of its poor performing loans and rescue its battered balance sheet. Italy’s banks are widely regarded as troublesome, with fears that a banking crisis there could spread across Europe. However, the UK’s banks are only marginally exposed to Italy.
UniCredit chief executive Jean Pierre Mustier said the cuts and fund raising is a “pragmatic plan based on conservative assumptions”.
He added: “We are taking decisive actions to deal with our legacy issues to improve and support recurring future profitability to become one of Europe’s most attractive banks.”
UniCredit also plans to cut a quarter of is 3800 branches. The bank’s shares have halved this year. It claims the job cuts will save it more than €1 billion (£839 million) a year in costs.
The rights issue, the biggest-ever in Italy, will be launched early next year, and will be led by Morgan Stanley, JP Morgan and other investment banks. UniCredit has been offloading assets as it seeks to tidy up a messy balance sheet.
On Monday, it sold fund management arm Pioneer Investments to France’s Amundi for €3.88 billion.
Monte dei Paschi di Siena, the third-biggest bank in Italy, is trying to raise €5 billion to avoid a government bailout.
