Milan (AFP)

The Italian bank UniCredit, facing its counterparts in a difficult context, will cut 8,000 jobs and close 500 branches by 2023, while significantly increasing the dividends paid to shareholders.

This new bloodletting will result in a decrease of 12% in full-time equivalent (FTE) staff and 17% in the number of branches in Western Europe.

Since his arrival at the head of UniCredit in the summer of 2016, the French Jean-Pierre Mustier has led a vast reorganization of the bank, already reducing the number of some 14,000 full-time equivalents and closing more than 900 branches.

Confronted with a complicated environment, marked in particular by low interest rates and politico-commercial tensions, a dozen European banks, including Societe Generale, Deutsche Bank and HSBC, have announced since the beginning of the year the deletion of more 44,000 positions. With UniCredit, the figure increases to more than 52,000.

This downswing will be conducted under the new strategic plan 2020-2023 that the first Italian bank in terms of assets on Tuesday to investors in London.

"In the previous plan, we acted in a socially responsible manner and we will continue to do so," said Mr. Mustier, referring to these job cuts at a conference.

These measures will enable it to reduce its costs in Western Europe by one billion euros during the life of the plan, compared to 2018.

"We successfully carried Transform 2019 (the previous plan), exceeding key objectives and laying a solid foundation for the new 2020-2023 plan," commented Mr. Mustier.

Under his leadership, the bank, which in 2016 was among the worst performers in stress tests conducted by the European Banking Authority (EBA), has changed profoundly.

It has boosted its capital by raising 13 billion euros and has cleared its accounts of billions of euros of bad debts - credits at risk of not being repaid - operation it intends to pursue.

It has also sold a number of assets deemed non-strategic, such as its stake in its former subsidiary Finecobank or the main Italian investment bank Mediobanca, and has reduced the assets in the Turkish bank Yapi Kredi.

- Four pillars -

"Team 23" is built around four pillars: increasing and strengthening the customer base with simplified processes and innovative products, increased productivity, disciplined risk management and capital management with a competitive edge. net increase in dividends paid to shareholders.

Over the 2020-2022 period, UniCredit will thus pay 40% of its net profit to shareholders (10% of which through the repurchase of shares), compared to 20% announced in 2016 and 30% in 2017. This amount will rise to 50% in 2023 .

In total, eight billion euros will be paid to shareholders between 2020 and 2023, including two billion through share buybacks.

Regarding its revenues, UniCredit forecasts an average annual increase of 0.8% between 2018 and 2023, reaching 19.3 billion euros. At the same time, its net earnings per share should increase by 12% per year.

At the Milan Stock Exchange, investors welcomed these announcements, but without excessive enthusiasm: thirty minutes after the opening, the title gained 1.23% to 12.52 euros, in a market up 0.93%.

Asked about possible cross-border mergers, Mr. Mustier stressed that the bank favored the repurchase of shares and that it "could consider only small acquisitions", thus excluding a large-scale operation.

He also indicated that in the field of insurance, she intends to continue to work with partners, rather than develop this activity internally.

For the future, "we will continue to rely on our competitive advantages: our network in Europe (...), the bank's leading position for small and medium-sized enterprises (SMEs) and our large and growing customer base. ", he added.

At the same time, the bank intends to increase its efficiency: it will become "paperless" in Italy in mid-2020, in Germany and Austria in 2021, and in the rest of Europe in 2023.

© 2019 AFP