Unicredit, Italy’s biggest bank by capitalization, said yesterday it planned to cut 9,000 jobs in western Europe and invest in central and eastern Europe to boost profits.
Staffing in western European markets, mainly Italy, Austria and Germany, is to be reduced “which will impact some 9,000 of the 100,000 jobs” in the region, the company said in a statement presenting its strategic plan for 2008 to 2010.
“[In] central and eastern Europe, the group will expand its network significantly, while in western Europe the focus will be on optimization, efficiency, restructuring and cost control,” the bank said.
Unicredit said it planned to open 1,300 branches in eastern Europe where 11,500 jobs will be created.
The move reflects the attraction of the emerging eastern European economies where incomes are rising fast and consumers are demanding an increasing range of financial products.
“For the foreseeable future the CEE-region [central and eastern Europe] will continue to grow much faster than western Europe,” the bank said.
Unicredit, which bought Italian peer Capitalia last year to become what was then the biggest bank in the euro zone and the second-biggest in Europe, says it has the biggest international network in eastern Europe with 3,600 branches.
As a result of its expansion in eastern and central Europe, it said revenues from the region would grow at an annual rate of 19 percent. Group revenues were forecast to increase by 6.7 percent between 2008 and 2010.
The cost-savings and investment would result in growth of net profit per share rising by 10 percent to 12 percent annually, excluding exceptional items, Unicredit said.
Some of the job cuts in western Europe are a result of the takeover of Italian bank Capitalia by Unicredit last year.
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