Azernews.Az

By Bloomberg

UniCredit SpA is reviewing its business plan, prompted by the expectation that low interest rates will prevail over coming years, to focus on cost cuts and offering more profitable banking services while expanding outside its home market.

“The bank is considering several actions in view of a new macroeconomic scenario with a prolonged period of low interest rates,” Chief Executive Officer Federico Ghizzoni told reporters in Milan late Monday. The review will be completed this year, he said.

UniCredit is considering strengthening its presence in the fastest-growing regions of the Middle East, China and Latin America as part of the review, Ghizzoni said. The CEO plans to open new branches and offices in those regions and develop alliances with local banks, while he ruled out acquisitions for now.

UniCredit, Italy’s biggest bank, is reducing costs and disposing of assets, including its money-management unit, as part of a plan approved last year that targets annual profit of 6.6 billion euros ($7.48 billion) by 2018. The initiatives announced Monday come as lenders face growing pressure on margins as central bank policies flood economies with cheap funds.

UniCredit operates in 17 countries, with more than 147,000 employees and about 8,500 branches. The lender is among the top banks in central and eastern Europe where it generates about 18 percent of revenue.