Bloomberg News

UniCredit to Reduce Europe Offices by Half as Bank Slashes Costs

December 13, 2011

Dec. 7 (Bloomberg) -- UniCredit SpA, Italy’s biggest bank, plans to cut the number of its corporate offices by about half in the next few years, saving 50 million euros ($67 million) a year starting in 2015.

“We want to reduce the space used by the bank’s network,” Paolo Gencarelli, head of UniCredit’s real estate unit, said in an interview in his Milan office. The lender will reduce its main offices to 75 from 160 by closing rental contracts and selling some of its own property, Gencarelli said.

Chief Executive Officer Federico Ghizzoni is cutting costs and reducing headcount to strengthen the bank’s finances and boost profitability. UniCredit, which plans to sell 7.5 billion euros ($10 billion) of shares in January, aims to cut 6,150 staff through 2015 and dispose of assets in non-strategic countries.

UniCredit is in talks to sell its Hamburg Alter Wall headquarters and several buildings in downtown Rome. In Milan, where the lender is based, UniCredit is canceling rental contracts for office space as it prepares to move into its new corporate headquarters in 2013, Gencarelli said.

The reduction of offices and the adoption of new workplace policies will cut 292,000 square meters (3.14 million square feet) of space in the next four years. In Munich, employees of UniCredit’s HVB AG unit will move from their recently sold headquarters to the Arabella High-Rise in the city’s Bogenhausen neighborhood. UniCredit is investing 170 million euros to renovate the building.

Energy Savings

In Vienna, the bank will move its 4,000 employees into a single location in the suburbs. Similar moves are planned for staff in Zagreb, Sofia, Bucharest, Moscow and Prague, Gencarelli said.

“We will save money not only by reducing offices, but also from the energy savings and increasing workplace and building quality,” according to Gencarelli. UniCredit will reduce its CO2 emissions by 50 percent, he said.

In Milan, UniCredit plans to reduce its main corporate offices to four from 24, with about 4,000 employees transferring to the headquarters being built at the three Porta Nuova skyscrapers at the beginning of 2013, Gencarelli said.

American property developer Hines is building the office towers at a new business park designed by the architectural firm of Pelli Clarke Pelli. UniCredit signed a leasing contract that will allow the bank to save 20 million euros annually starting from 2014.

“Our philosophy will be based on flexibility, so we are now renting and not buying the new headquarters we are moving into,” the executive said.

UniCredit is also cutting retail branches and relocating space to save an additional 50 million euros annually. The lender will close 200 branches, or 5 percent of the total, in the country by 2015. It aims to reduce total space at its branches by 15 percent, either by renting or selling to retailers.

The bank is negotiating with about 20 retailers, Gencarelli said. ‘We don’t need so many branch windows on main streets, which instead could be useful for retailers.”

--Editors: Dan Liefgreen, Ross Larsen

To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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