UniCredit, feeling squeeze from low rates, cuts 18,200 jobs

Italy’s top bank UniCredit announced plans Wednesday to shed over 18,000 jobs in an effort to stay profitable as low interest rates and the weak economy weigh on earnings.

The cuts are to save the bank 1.6 billion euros ($1.71 billion), the bank said in a statement.

A third of the 18,200 jobs are to go as UniCredit sells off a bank in Ukraine and a joint venture between its Pioneer unit and Santander.

The rest is to be achieved through cuts in Italy, Germany and Austria, leaving the bank with 111,000 employees in 2018.

The bank hopes to achieve a net profit of 5.3 billion euros by then — a figure revised down from its earlier estimate of 6.6 billion euros.

UniCredit’s chief executive Federico Ghizzoni described the plan as “rigorous and at the same time ambitious ... in a persistently tough macroeconom- ic environment, marked by historically low interest rates and decelerating worldwide economic growth”.

He said the bank would focus on “significant cost containment measures and further discontinuity actions” as well as “exiting or restructuring poorly performing businesses”.

The cuts involve further reducing the number of bank branches in Italy, Germany and Austria, closing 800 by 2018. (AFP)