MILAN : Italian bank UniCredit said on Tuesday it would no longer provide basic banking services to Asia Pacific units of its European clients under plans to streamline its international presence and cut costs.
The move will result in the Milan-based bank closing down its offices in Tokyo, Shanghai and Singapore while maintaining only a branch in Hong Kong, a person close to the matter said.
“We will … no longer offer account banking and other banking services to the Asia Pacific region subsidiaries of clients located in our core coverage regions,” UniCredit said in reply to a Reuters request for comment.
The decision was communicated to UniCredit’s staff in China on Monday, another person with knowledge of the matter told Reuters.
UniCredit will rely on correspondent banks to provide corporate services, such as transaction and foreign exchange, to European customers in Asia Pacific, it said.
It will continue to support Asian corporate and financial institution customers in their investments and business in Europe, an activity entrusted to its Hong Kong branch.
UniCredit also has a representative office in Beijing that will remain open.
The moves affecting the Asian centres are part of a wider strategy aimed at simplifying operations which UniCredit’s new Chief Executive Andrea Orcel unveiled on Dec. 24 when he presented a new plan to 2024.
By focusing on businesses that maximise returns in relation to the amount of capital they absorb, Orcel has pledged to reward shareholders with 16 billion euros ($18 billion) in dividends and buybacks over the period.
To offset in part investments needed for a digital upgrade, UniCredit is cutting staff in central offices and international hubs, while sparing its branch network that was heavily hit by past restructurings.
Italy’s only bank deemed of global systemic relevance by regulators, UniCredit also has businesses in Germany, Austria and central and eastern Europe.
($1 = 0.8812 euros)
(Reporting by Valentina Za in Milan and David Kirton in Shenzen; Editing by Emelia Sithole-Matarise)
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