June 16 (Bloomberg) -- Intesa Sanpaolo SpA, Italy’s second- biggest bank, plans to close as many as 400 branches as part of a plan to cut costs, the lender’s unions said in a statement late yesterday.
Intesa, which met union representatives yesterday to discuss its business plan, may also convert an additional 600 branches to sales offices, according to the statement. A spokeswoman for the bank declined to comment on the matter.
“We see this as a U-turn in respect to the strategy pursued over the past few years,” analysts at Mediobanca SpA, wrote in a note today. The brokerage reiterated its “neutral” recommendation on the stock.
Intesa, which is completing a 5 billion-euro ($7 billion) share sale to boost capital, targets net income of 4.2 billion euros by 2013 through organic growth, higher productivity and cutting costs. The bank plans to reduce its workforce by 3,000 people by 2013 and to redeploy 5,000 employees to its retail business.
Intesa fell 4.9 percent in Milan yesterday, giving the company a market value of 28 billion euros. The Bloomberg Banks and Financial Services Index has dropped 8 percent in the past six months, compared with Intesa’s 15 percent decline.
--Editors: Dan Liefgreen, Jerrold Colten
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