MILAN (AP) — Italian bank UniCredit has raised over 1 billion euros ($1.1 billion) in asset sales this week as its new CEO moved quickly to reinvigorate the bank’s balance sheet.
Italy’s largest bank by assets said Wednesday that it raised nearly 750 million euros from the sale of a 10-percent stake in the Polish Bank Pekao S.A. and another 328 million euros from the sale of an equal share of its internet banking unit Fineco. UniCredit retains a 55-percent share of Fineco and around 40 percent of Pekao, Poland’s second-largest lender.
UniCredit shares, which have dropped by around two-thirds this year, were down 3.5 percent at 2.026 euros Wednesday after an initial spike of 4.5 percent.
The asset sales come after the bank’s announcement on Monday that it will be conducting a thorough review of its business under the new CEO Jean Pierre Mustier, who was brought in last month to restore the bank to health.
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UniCredit’s efforts to improve its financial position come amid renewed concerns over the health of Italy’s banks following Britain’s vote to exit the European Union.
JP Morgan analysts said in a note that “the speed of execution is impressive,” adding that they also expect that the Austria business and Pioneer Investments arm, as well as smaller eastern European units, could also be sold.
They said a capital increase, however, isn’t ruled out “to fully close the debate and provide margins to maneuver.”
The bank this week said its moves to improve its capital position and profitability would include further cost-cutting and a reduction in its risk profile.
The bank identified German subsidiary HVB, its central and eastern European operations and corporate investment bank as strategic operations, and said the Italian operation was core to the group, leaving open other possible moves.