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UniCredit plans to cut around 10,000 jobs: source
September 14, 2015 / 12:58 PM / 2 years ago

UniCredit plans to cut around 10,000 jobs: source

SARAJEVO (Reuters) - UniCredit (CRDI.MI), Italy’s biggest bank by assets, is planning to cut around 10,000 jobs, or 7 percent of its workforce, as it seeks to slash costs and boost profits, a source at the bank told Reuters on Monday.

The headquarters of UniCredit, Italy's biggest bank by assets, is pictured in downtown Milan, February 17, 2015. REUTERS/Stefano Rellandini

The planned cuts will be concentrated in Italy, Germany and Austria, several sources said, adding that they include 2,700 layoffs in Italy that have already been announced.

A UniCredit spokesman declined comment beyond noting that the bank’s CEO Federico Ghizzoni had on Sept. 3 said there were no concrete numbers on potential lay-offs, after a report said it was considering eliminating 10,000 positions in coming years.

Ghizzoni is reworking a five-year strategic plan, unveiled only last year, that will aim to boost revenue and cut costs. The revised plan is expected to be announced in November.

“The plans are for 10,000 job cuts,” the bank’s insider said, speaking on condition of anonymity. “They will be mainly in Italy, Austria and Germany.”

UniCredit, which has 146,600 employees across 17 countries, is under pressure to boost its profits as low interest rates are expected to keep hurting its earnings in coming years.

Other banks, such as Britain’s Barclays (BARC.L), are also cutting thousands of jobs and selling assets, as lending margins are squeezed.

Financial sources said on Monday Deutsche Bank (DBKGn.DE) was aiming to cut roughly 23,000 jobs, or about a quarter of the total, through layoffs mainly in technology activities and by spinning off its PostBank DPBGn.DE division.

Reducing costs would also help UniCredit allay market concerns that it may need to launch a share issue, something Ghizzoni has repeatedly denied.

Any cost cutting has long been expected to target Germany and Austria, where the cost-to-income ratio was respectively 80 percent and 91 percent in 2014, compared to a group average of 61.5 percent.

But the exact numbers are still under discussion and may change, as could the number of countries involved, sources said.

One source close to the matter said Germany and Austria were in line for at least 1,500 job cuts each to simplify structure and eliminate duplication in areas like compliance and legal matters.

UniCredit posted first-half earnings of just above 1 billion euros, half those of domestic rival Intesa Sanpaolo (ISP.MI), which at the end of June had a core capital ratio of 13.3 percent against UniCredit’s 10.4 percent.

Additional reporting by Paola Arosio in Milan Writing by Silvia Aloisi; Editing by David Holmes

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