03 December 2019
The approaching crisis with each passing day it becomes more obvious, already this Tuesday, December 3, Italian Bank Unicredit announced the reduction of 8 thousand employees and the closure of 500 branches. For the first time in ten years, the Bank intends to buy back shares worth 2 billion EUR. The implementation plan will take four years. Such events are associated with technical progress and negative interest rates.
Previously, the policy of banks was aimed at building capital, but times have changed and it is time to invest in the assets. To implement the plan, Unicredit will pay 40% of underlying net profit, despite the fact that such attachment is two more than the previous target. Considering the dividends and buybacks, the amount of the stake could rise to 50% in 2023.
Shares of Unicredit are the most stable in the Eurozone. This morning in early trading in Milan, shares of banks rose by 2%, but by 13:00 Moscow time the price dipped 0.9%. The new policy of the American government has a negative impact on the global economy. The introduction of new duties led to the fact that France's CAC 40 down 0.5%, the Euro Stoxx 600 declined 0.2% and the FTSE MIB index rose 0.4%.
CEO of Unicredit Jean-Pierre Moustiers ready for public non-cooperation with the Central Bank and the Supervisory authorities the ECB has already said privately that he would support the request.
At Unicredit hope that the European Central Bank will weaken the approach to the assessment of the requirements to Bank capital. As the previous head of Supervisory Board of the ECB Daniele nouy insisted that the capital requirements of the second level came from the private capital of each Bank, despite the fact that EU legislation provides for the use of subordinated debt instruments.