UniCredit to cut 14000 jobs and invest in digitisation

UniCredit to cut 14000 jobs and invest in digitisation

Italian giant UniCredit has become the latest bank to outline plans to cut thousands of jobs and invest billions of euros in digitisation in a bid to boost profits.

Under a sweeping three-year plan, the bank will eliminate 6500 jobs on top of previously announced cuts, bringing the total number of losses to 14000 by 2019, resulting in savings of EUR1.1 billion.

Meanwhile, hundreds of branches are being closed and EUR1.6 billion is being pumped into IT investments, including "digitalisation activities" and core system updates designed to smooth the transition to online and mobile-centric services.

These moves are designed to generate EUR1.7 billion net annual recurring cost savings from 2019, helping the lender make a EUR4.7 billion net profit despite weak revenue growth.

A EUR13 billion rights offer will help remove billions in bad debt from the bank's balance sheet.

Says recently installed CEO Jean Pierre Mustier: "We have developed a pragmatic plan based on conservative assumptions, with tangible and achievable targets, dependent on cost and risk management, levers which are firmly under our own control."

Shares in UniCredit initially fell on the plan before rising more than eight per cent.

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