UniCredit, Italy's biggest bank, has announced plans to shed 500 branches with the loss of 8,000 jobs - almost 10% of its current workforce.

The lender said its plans were aimed at boosting profitability and lacklustre shareholder value, as eurozone banks continue to be damaged by post-crisis negative interest rates and weak economic activity.

UniCredit, which has 28 million customers across Europe, has spent years restructuring and its latest business plan, up to 2023, reflected a further focus on cutting costs.

Image: Another major euro area bank, Deutsche Bank, cut thousands of jobs in the summer

It had previously cut staff numbers by more than a fifth.

The lender said it now aimed to save €1bn (£854m) - mostly through the job losses and branch closures - which are expected to be mostly felt in its home market of Italy.


The company refused to divulge the locations because talks with unions are ongoing.

Like UK banks, which have scaled back town centre operations, UniCredit said its move reflected an expansion in online banking.

It forecast that net profits would grow to €5bn (£4.27bn) by 2023 - up from €4.7bn (£4bn) that was forecast this year, with earnings per share rising 12% annually.

UniCredit said it also planned to return €8bn (£6.8bn) in value to shareholders through share buybacks, and raise dividends by 40% over the three-year period.

Chief executive Jean Pierre Mustier, who took charge in 2016, said the plan would increase shareholder value by €16bn (£13.6bn).

He told reporters in a conference call that low valuations for banking shares made share buybacks a better option than mergers, which would be necessary for banks to grow in size.

"No M&A (mergers and acquisitions) and that's it," he told the gathering.

After early gains, shares ended the day down by 0.4%.