UniCredit to Close 350 Branches in Italy by 2015

MILAN--UniCredit SpA (UNCFF, UCG.MI) Chief Executive Federico Ghizzoni said Tuesday that the bank has approved a plan to close an additional 350 branches in Italy by 2015, on top of the 150 branches where closures were planned to take place by the same year and have already happened.

Speaking to journalists here, Mr. Ghizzoni said that the bank will close 110 branches this year, out of the 350, and that this will result in cost-savings on real estate of around 15 million euros ($20 million). UniCredit has around 3,600 branches in Italy.

"These cost savings will be used to further invest on the development of Internet and mobile banking. Since 2009, we have closed 800 branches and this corresponds to savings of EUR100 million a year," Mr. Ghizzoni said.

The CEO also touched upon a plan to create a sort of bad bank in Italy that could solve in a systemic way the issue of growing non-performing loans held by Italian banks.

The plan, reported by Italian media over the weekend, would see the creation of a private entity by Italy's largest banks which will buy non-performing loans by banks and get funding from private institutional investors. The state would not be involved in such a plan.

"This plan hasn't progressed because there are differences on how the assets [NPLs] will be valued. We are proceeding alone on this [NPLs management]," Mr. Ghizzoni said.

He also said that the bank plans to merge its two Ukrainian units--Ukrsotsbank (USCB.UR) with UniCredit Bank Ukraina.

Write to Giovanni Legorano at [e-mail]

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