Italy's biggest bank Unicredit (EUREX: DE000A163206.EX -news) has set out plans to cut thousands of jobs and raise €13bn (£10.9bn) from investors under a shake-up to boost its ailing balance sheet.
It is the latest Italian lender to take drastic action as the sector labours under the weight of hundreds of billions of euros of bad loans, with the banks' woes compounded by political uncertainty.
Unicredit's latest proposal will see it axe an additional 6,500 workers over the next three years, adding to previously-announced cuts to take the total to 14,000, or 11% of its workforce.
It will also shut around a quarter of its branches.
The job cuts are designed to save €1.1bn (£900m) a year in staff costs.
Unicredit's cash call on investors will take place in the first three months of 2017 as it seeks to remove nearly €18bn (£15bn) of bad debt.
Markets welcomed the strategy, sending shares 9% higher.
It comes after rival Monte dei Paschi (Milan: BMPS.MI - news) di Siena said it was pressing ahead with plans for a private sector rescue designed to raise €5bn (£4.2bn) and avoid a government bail-out.
The fragile sector has been hit by fresh anxiety recently after Italy's prime minister Matteo Renzi resigned in the wake of a "no" vote in a constitutional referendum.
Shares (Berlin: DI6.BE - news) in UniCredit have more than halved in value this year - hit by concerns over bad loans, profitability and a weaker balance sheet than major European rivals.
Chief (Taiwan OTC: 3345.TWO - news) executive Jean Pierre Mustier said the group was taking "decisive actions" to offload its bad debts and "improve and support recurring future profitability".
Sky News.
Culled from Yahoo News.
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