[VIENNA] UniCredit's Bank Austria unit might not need to lay off workers under a planned restructuring of its retail arm, to be funded from provisions for the pensions of staff who will switch to the state pension system, its chief said on Tuesday.
UniCredit, Italy's biggest bank by assets, had said on Monday it would restructure its retail operations in Austria, seeking cost savings of 300 million euros (S$465 million) and shelving an option to sell the business.
Bank Austria Chief Executive Willibald Cernko told a news conference 2.1 billion euros earmarked for those pensions would cover the costs of the restructuring, as well as compensation payments to the 3,300 employees who would switch to the state system from the company's own pension plan. "We will ... eliminate a structural cost burden from the past," he said.
The bank also plans to cut its number of branches to 120 from 200 by 2018, retrenching to larger locations, and to focus investments on its digital operation. It aims to lift its Austrian retail business's return on allocated capital to 13 per cent by 2018. "We are pursuing a cost and revenue target and not a head-count target," Cernko said, adding that 60 per cent of savings would come from personnel costs. "I am convinced that we can carry out this adjustment process without forced layoffs."