UPDATE 2-UniCredit plans to cut thousands of jobs-sources

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FRANKFURT, June 25 (Reuters) - Europe's fourth-largest bank UniCredit SpA CRDI.MI plans to cut thousands of jobs in western Europe but add personnel as it expands in fast-growing eastern Europe, sources familiar with the situation said on Wednesday.

The Italian bank is due to present its strategic plans in Vienna on Thursday.

The sources added that Italian and German units of the bank, which bought Germany's HVB HVMG.DE in 2005, would be most affected by the job cuts, the sources told Reuters.

A UniCredit spokesman had no comment.

UniCredit, Italy's second-biggest bank in terms of retail branches after Intesa Sanpaolo SpA ISP.MI, is expected to give more details of the job cuts on Thursday, the sources added.

The lay-offs and hirings could be part of Chief Executive Officer Alessandro Profumo’s announced aim to expand in eastern and central Europe, where it is the biggest lender.

Operating income in the region rose 36 percent in the first quarter even as it dropped 16.5 percent for the group. The unit includes Turkey, Russia and Hungary and generates about 10 percent of UniCredit’s profits.

UniCredit had about 181,000 employees at the end of the first quarter. About 56,000 of them were in the central and eastern Europe division and 26,000 in its Poland’s Markets unit, according to its quarterly report.


Although some banks hit by the U.S. subprime credit crisis have laid off staff, Italian banks like Intesa Sanpaolo SpA ISP.MI have largely weathered the turmoil. Their domestic lending policies are relatively conservative, making Italy a comparatively lucrative market.

France's Natixis SA CNAT.PA, hit by the impact of the global credit crisis, said in May it was planning job cuts. A trade union source put the number at 1,650.

Switzerland's UBS AG UBSN.VX said last month it was slashing 5,500 jobs, or about 7 percent of its work force.

Among U.S. banks cutting staff, U.S. bank Lehman Brothers Holdings Inc. LEH.N said in May it was trimming about 1,300 jobs, or 5 percent of its work force.

The job cuts would come with Italy’s unemployment climbing as its economy sputters. Joblessness jumped to 6.5 percent in the first quarter, its highest level since the third quarter of 2006.

In its home base of Italy, UniCredit has had to sell nearly 200 branches to meet antitrust requirements after its takeover of Capitalia last year.

Shares in UniCredit, which has a market value of about 54 billion euros ($84.12 billion), closed up 1.8 percent at 4.125 euros. It lagged a 3.02 percent rise by the DJ Stoxx index of European banks .SX7P. (Reporting by Christian Kraemer, writing by Jo Winterbottom and Ian Simpson)