World Economy

UniCredit Targets $5.7b Profit

UniCredit Targets  $5.7b ProfitUniCredit Targets  $5.7b Profit

Italy’s UniCredit will target €5.3 billion ($5.7 billion) net profit by 2018 as well as higher sustainable return to shareholders with Return on Tangible Equity (RoTE) at 11%, the bank revealed in its strategic plan.

UniCredit, a European financial leading Group in banking services, also announced that it will cut 18,200 jobs, 14% of its total workforce and more than expected, which will mainly result from the sale of the Ukrainian subsidiary and the Pioneer Investments joint venture with Santander Asset Management, Investment Europe reported.

The largest Italian bank by assets also said that it will sell its Austrian retail banking unit.

UniCredit also said that it forecasts a common equity Tier 1 capital ratio of 12.6% by 2018.  The Italian bank also intends to invest €1.2 billion in digital evolution, the bank statement also said.

At the same time, UniCredit announced that it has reached a binding agreement to combine Pioneer Investments and Santander Asset Management.

“Further to the preliminary agreement announced on April 23, 2015, UniCredit, Santander, and affiliates of Warburg Pincus and General Atlantic have signed a binding master agreement to combine Pioneer Investments and Santander Asset Management to create a leading global asset manager.

“As the next step, the parties will be seeking the necessary regulatory and other approvals in many of the markets where the two firms have a presence. The full closing of the transaction is expected to happen in 2016,” the statement read.

The details of the deal, number of funds on offer, market footprint, are yet to be released by the company.