Italian bank UniCredit is to ask shareholders for 7.5 billion euros ($10.3 billion) in new capital, cut 6,150 jobs and retreat from key business areas in a bid to repair its ravaged balance sheet and return to profit. Revealing a 10.6 billion euro third-quarter loss along with Europe's largest bank fundraising in over a year, it scrapped its dividend payment for 2011 and joined other lenders with plans to slash its loans.
UniCredit, the only Italian name in a list this month of the most important global banks, is the country's most internationally exposed lender, operating in 22 countries. But it is bearing the brunt as the eurozone's third-largest economy is sucked ever deeper into the region's debt crisis.
UniCredit holds 38 billion euros of Italian government bonds and its shares have lost half of their value this year, leaving its fundraising representing half of its value and making it painfully dilutive for investors. Its shares closed down 6.2 percent at 0.77 euros, valuing it at just under 15 billion euros.
Some 5,200 of the jobs will go in its home base of Italy, now in the eye of the euro zone's crisis storm. Another 2,000 could go in western Europe, including 800 in Austria, partly offset by new jobs in eastern Europe. About 62,000 of the bank's 160,000 staff are in Italy, with 51,000 in central and eastern Europe.
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