UniCredit to pay bonus to staff to help with rising living costs

UNICREDIT will give employees in Italy a one-off payment of 2,400 euros (S$3,408.2) to reward productivity and help them to weather rising prices, Italy’s second-biggest bank said on Friday (Dec 2).

As part of a broad accord signed with unions on Thursday, UniCredit will also pay for 850 branch employees who would qualify for pension by the end of 2029 to opt for early retirement, and replace them with new staff under 35.

The early exits, which will take place by the end of 2024, are expected to cost UniCredit around 170 million euros, a source close to the matter said.

UniCredit declined to comment on the figure.

The bank’s guidance for 2022 costs of below 9.4 billion euros is unaffected, a second source said.

Banks in Italy normally lay off staff only on a voluntary basis by paying up to 80 per cent of their salary until they start getting their pension. Unions normally demand that one in two workers is replaced.

The one-off bonus includes a 1,600 euro productivity premium for 2022 whose payment UniCredit has decided to bring forward.

“This accord reflects the positive contribution of the Italian market to the group’s good performance,” the bank said.

UniCredit CEO Andrea Orcel, a former investment banker who arrived in April 2021, has pledged to refocus the bank’s business on Italy, its biggest market which however had lost importance under previous CEO Jean Pierre Mustier.

The remaining 800 euros are a one-off contribution facilitated by government measures which make companies’ payments to staff to help with the cost of living crisis exempt from tax.

UniCredit had announced similar measures in Germany where the government has also introduced an aid scheme to allow companies to pay tax free bonuses.

UniCredit said last month it would pay a bonus of 2,500 euros to its staff in Germany to help them cope with soaring prices.

UniCredit has 34,608 staff in Italy and 13,740 in Germany, according to its website. REUTERS