Italian bank UniCredit to 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 its offices in Tokyo, Shanghai and Singapore while maintaining only a branch in Hong Kong. UniCredit will rely on correspondent banks to provide corporate services, such as transaction and foreign exchange, to European customers in Asia Pacific. 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.
Under the reorganization, UniCredit will also shut representative offices in Seoul, Hanoi and Mumbai while maintaining the one in Beijing. The moves affecting the Asian centres are part of a wider strategy aimed at simplifying operations. 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.