Italian banking group UniCredit will lay off nearly 8,000 employees and close around 500 branches in the next three years for maximising shareholder value.
The move is part of the bank’s 2020-2023 strategic plan called Team 23, which will focus on controlling costs and on enhancing customer experience.
The new plan takes over from Transform 2019, which focused on reducing costs for the bank. UniCredit said that its operating costs had come down from €12.2bn in 2015 to €10.1bn in 2019.
The bank wants to achieve operating costs of €10.2bn in 2023 by implementing Team 23.
Through the new plan, the bank hopes to make an underlying net profit of €4.3bn in 2020, and wants to increase it to €5bn in 2023.
The Italian banking firm is aiming to return €8bn capital to shareholders during 2020-2023, which includes €2bn of share buybacks.
Apart from job cuts and branch closures, the other cost-cutting measure to be taken by the bank is elimination of the use of paper, implementing straight-through processing for faster transactions.
UniCredit aims to become a paperless retail bank
The Italian bank also plans to facilitate the exchange of digital documents between the bank and its customers, and offer a wider set of digital-ready contracts to enable the increased use of digital signatures.
UniCredit said that launch of the paperless retail bank will start in Italy in mid-2020, and will be followed by Germany and Austria in 2021 for core products, and by 2023 in Central and Eastern Europe (CEE).
UniCredit CEO Jean Pierre Mustier said: “Team 23 is about maximising stakeholder value creation, including a renewed focus on customer satisfaction thanks to streamlined processes and innovative products, as well as increased shareholder returns.
“During the plan we estimate we will create a total of 16 billion of value for investors through a combination of dividends and share buybacks as well as by growing tangible equity. We will continue to draw on our competitive advantages: our unique Western, Central and Eastern European network, our position as the go-to bank for SMEs in Europe and our extensive and growing client franchise.”
Recently, the Italian banking group signed a deal with Koç Group to reduce its stake in the Turkish banking company Yapi Kredi Bank to under 32%.
