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UniCredit to cut 18,200 jobs, expects lower net profit

Staff writer |
UniCredit is cutting its workforce by 14 percent and looking to restructure or sell businesses in Austria and Italy as it seeks to bolster its finances without asking shareholders for cash.

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UniCredit unveiled a new business plan that forecast a CET1 capital ratio - a key measure of financial strength - of 12.6 percent in 2018.

The ratio would drop to 11.5 percent after dividend payments but is above a target of 10 percent in a plan last year that had to be scrapped because it was based on an over optimistic economic outlook and a more lenient regulatory framework.

The bank, Italy's biggest measured by assets, said net profit for 2018 was now expected to be 5.3 billion euros ($5.7 billion), down from 6.6 billion envisaged previously.

Job cuts will total 18,200, mainly in Italy, Germany, Austria and central and eastern Europe.

Unicredit is targeting cost cuts of 1.6 billion euros and said that by end-2016 will either exit or revamp poor performers, such as its retail business in Austria and leasing operations in Italy. Cost cutting will be partly offset by a 1.2 billion euro investment in digital technology.

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