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UniCredit to shed 18,200 jobs, boost capital

UniCredit, Italy's biggest bank by assets, plans to slash thousands of jobs and restructure or exit its retail business in Austria and leasing operations in Italy, seeking to bolster its finances without asking shareholders for cash.

UniCredit, the latest major European bank to announce an overhaul to boost profits and increase capital, said on Wednesday it expected a so-called CET 1 capital ratio of 12.6 percent in 2018 compared with 10 percent in a previous plan.

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Net profit for 2018 is expected at 5.3 billion euros ($5.7 billion), down from 6.6 billion envisaged in the previous plan.

"The targets look ambitious to us with the capital ratios, net profit and job cuts numbers above expectations," a Milan-based trader said.

UniCredit said it was targeting cost cutting measures worth 1.6 billion euros by 2018.

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Shares in the lender extended earlier gains after the release of the business plan to trade up more than 3 percent. By 1335 GMT, they were up 2.6 percent while the European bank index was up 1 percent.

In a statement, UniCredit said it planned to reduce its workforce by 18,200 people, including 6,000 through the sale of its Ukraine business and a joint venture of its Pioneer asset management operations with Santander.

Job cuts will take place both in local and global corporate centres as well as in commercial banks in Italy, Germany, Austria and Central and Eastern Europe, the lender said.