UniCredit to open 900 branches in central and eastern Europe
LONDON: UniCredit SpA plans to boost investments in selective countries and businesses in central and eastern Europe and will open 900 branches as it sees the region growing faster than the rest of its banking empire.
The bank's new Chief Executive Federico Ghizzoni pointed to some problem countries in the region, including Kazakhstan, but declined to elaborate on any disposal plans. There has been media speculation that Italy's top bank might sell some assets in the region, where it is market leader thanks to a 6.4 percent market share in total assets.
The division, which spreads over 19 countries, is a key driver of UniCredit's returns as it generates 56 percent of group pretax profit.
Ghizzoni said Russia, Turkey and Poland will take the lion's share of the planned investments as they are expected to generate 75 percent of total revenue in the region by 2012. "We have taken the decision to increase capital allocation to central and eastern Europe faster because we think overall return and risk profile will justify this (strategy)," Ghizzoni, who used to run the division before replacing longterm CEO Alessandro Profumo, told analysts at a presentation in London. "Capital allocation will go mostly to the most attractive markets and banks," he said, pointing to Turkey, Russia and Poland. Central to UniCredit's investment plan will be 900 new bank offices in next five years on top of its existing 3,860 branch network. -PB News