East Europe Will Help UniCredit Meet Targets: CEO

Shifting focus to fast-growing Eastern Europe and shedding jobs in the mature Western European markets will ensure that the continent's second-largest bank meets its ambitious growth targets, UniCredit CEO Alessandro Profumo told "Squawk Box Europe" on Wednesday.

UniCredit will open 1,300 outlets in Central and Eastern Europe between 2008 and 2010, adding 11,500 jobs, but will shed 9,000 posts of 100,000 in Italy, Germany and Austria, the bank said in a statement.

"In Central Europe we see good growth in the future, despite the financial markets turmoil. We think it is proper to invest in opening new branches," Profumo said.

The plan will be reviewed every six months and will help the bank meet its target of for compound annual earnings per share growth of between 10 percent and 12 percent through to 2010, he added.

In Western Europe, the rate at which costs will rise will be 0.8 percent, lower than inflation, while at group level it will be 3.4 percent including opening of the new branches, while on the. revenue side the growth will exceed 6 percent, Profumo said.

"We lose less capital in relation to the revenues we are able to generate," Profumo added.

The countries where UniCredit has the best opportunities are likely to be Poland, Russia and Turkey, Profumo said, explaining that Poland is converging to Western European living standards, Russia is growing fast partially due to the high oil prices while in Turkey UniCredit plans to boost its retail market share.

UniCredit reaps around 50 percent of its revenues from outside Italy and has a presence in 23 countries with over 40 million clients. In the CEE region, it says it has the largest international banking network with over 3,600 branches.

UniCredit has already reported credit-related writedowns and losses of 1.726 billion euros ($2.69 billion). On Thursday, it said there had been no additional net writedowns in its ABS portfolio during the second quarter.

Profumo rejected suggestions that UniCredit may get involved in bidding for Deutsche Postbank.

"We think that the acquisition path we had with HVB and Capitalia has been the right one, now we are fully focused on achieving the full value of the franchise," he said.

-- Reuters contributed to this report