Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

UniCredit Said to Scale Down Eastern Europe Equity Business

UniCredit Said to Scale Down Eastern Europe Equity Business
The UniCredit SpA logo sits on the roof of the company's headquarters in Rome. Photographer: Alessia Pierdomenico/Bloomberg

UniCredit SpA, Italy’s biggest bank, is shrinking its cash equity division in central and eastern Europe as part of a plan to increase profitability and cut costs, according to two people with knowledge of the matter.

The lender is closing its securities units in Russia and Romania, and is scaling down the business in Turkey and Poland, said one of the people, who asked not be identified because the plan isn’t public. The plan involves about 60 of 80 people working at its equity brokerage in the region, including sales and derivatives, said the person. A spokesman for Milan-based UniCredit declined to comment.

“This is good news for the bank,” said Angelo Drusiani, who manages about 3 billion euros ($3.7 billion) at Banca Albertini Syz & C. in Milan. “It goes in the right direction, focusing on its core business and cutting activities with low margins.”

UniCredit’s corporate and investment-banking chief, Jean-Pierre Mustier, who previously ran Societe Generale SA’s investment bank, is reviewing the unit to reduce risks and boost profit. The bank has already closed its equity brokerage in western Europe, cutting jobs in London and Milan last October.

UniCredit, which operates in 22 countries, including Germany, Austria and Poland, gets about 57 percent of its revenue outside Italy. The bank’s profit rose 13 percent to 914 million euros in the first quarter.

Goodwill Writedown

The lender last year wrote down to zero the goodwill on the Russian brokerage it bought for four times book value in 2006, doubting the business can make money in an area increasingly targeted by state-owned banks. Sergei Sidorov, the head of UniCredit’s securities unit, left at the end of last year and was replaced by Alexander Cheporov.

“UniCredit has been a victim of the debt crisis in the southern rim of Europe, and as we have seen in the past, when banks are looking to scale down Russia tends to be in the firing line,” Peter Westin, chief strategist at Aton Capital, wrote in e-mailed comments. Westin worked at Aton before it was sold to UniCredit in 2006 for $424 million. The founder restarted the brokerage using the same name in 2009.

The decision to shrink or close the cash equity units in the four countries was taken because they were too expensive and the same activity can be outsourced or done by the parent company, the people said.

UniCredit’s shares rose 0.1 percent to 2.46 euros by 4:47 p.m. in Milan trading, paring an earlier gain of as much as 3.4 percent.

UniCredit, the biggest lender in the former communist part of Europe, has already reined in its growth plans for the region and focused investments on its most promising markets, Russia, Turkey, Poland and the Czech Republic, while shelving branch expansion plans in Hungary and Romania.

The lender has dismissed the idea that it was pulling out of the region, which contributed half of its recurring operating profit in the first quarter.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.