UniCredit, Italy’s biggest bank by assets, plans to slash thousands of jobs and restructure or exit its retail business in Austria and leasing operations in Italy, seeking to bolster its finances without asking shareholders for cash.

UniCredit is the latest major European bank – it also holds shares in Bank of Valletta – to announce an overhaul to boost profits and increase capital. It said yesterday it expected a so-called CET 1 capital ratio of 12.6 per cent in 2018 compared with 10 per cent in a previous plan.

Net profit for 2018 is expected at €5.3 billion, down from €6.6 billion envisaged in the previous plan.

“The targets look ambitious to us with the capital ratios, net profit and job cuts numbers above expectations,” a Milan-based trader said.

UniCredit said it was targeting cost-cutting measures worth €1.6 billion by 2018.

Shares in the lender extended earlier gains after the release of the business plan to trade up more than three per cent. By 1335 GMT, they were up 2.6 per cent while the European bank index was up one per cent.

In a statement, UniCredit said it planned to reduce its workforce by 18,200 people, including 6,000 through the sale of its Ukraine business and a joint venture of its Pioneer asset management operations with Santander. Job cuts will take place both in local and global corporate centres as well as in commercial banks in Italy, Germany, Austria and Central and Eastern Europe, the lender said.