UniCredit considers firing thousands of bankers

UniCredit SpA is considering thousands of job cuts and slashing operating costs as part of a new strategic plan to be unveiled in December, according to people familiar with the matter.

The Italian lender is weighing as many as 10,000 cuts, though final numbers are still under review and may be much lower, the people said, asking not to be identified as the matter is private. The dismissals will involve staff in Italy – where the company has the largest number of employees – as well as in other countries, they said. UniCredit may also reduce other operating expenses by as much as 10% in the plan, the people said.

Chief Executive Officer Jean Pierre Mustier is preparing his next set of targets after exceeding cost-cutting and asset quality goals in the previous three-year plan. Mustier, who spent the first part of his tenure cleaning up bad loans, reducing jobs and strengthening the balance sheet, has already said that he expects to accelerate the run down of non-essential business, adjust its holdings of Italian sovereign debt and improve its capital buffer.

UniCredit joins other large European banks slashing costs and reducing job numbers as they seek to adapt to low interest rates that make it harder for lenders to increase revenue. Deutsche Bank AG plans to cut 18,000 positions in a sweeping overhaul, while Societe Generale SA in April announced plans to cut 1,600 jobs globally and exit capital-intensive businesses.

UniCredit Shares

UniCredit rose 0.3% to 11.25 euros as of 12:20 p.m. in Milan trading, giving the bank a market value of 25 billion euros ($28 billion). The shares have gained 14% this year compared with a 2% increase of the 47-member STOXX Europe 600 Banks Index.

A UniCredit spokesman declined to comment.

The bank has already taken steps to put itself in a stronger financial position ahead of the plan’s presentation. Earlier this year it raised about 2.1 billion euros by selling its holding in Banca Fineco SpA. UniCredit’s new business plan will be based on organic growth and will try to simplify the way the bank does business to enhance efficiency, Mustier told newspaper Milano Finanza in an interview last week.

Among the options UniCredit is reviewing to reduce its cost of funding is the creation of a separate holding company in Germany for its foreign businesses, people with knowledge of the matter said earlier this month.