The worst is over for UniCredit, says CEO Ghizzoni

The fortunes of UniCredit, the second largest financial services group in Italy and parent company of Pioneer Investments, have turned positive.

Chief executive Federico Ghizzoni, speaking on Bloomberg Television, was in bullish mood: “The worst is over for Italy and for UniCredit.”

The battles to restore the group’s profitability continue, however. Ghizzoni said: “There is a daily battle on costs, and I’m sure we will beat our plan in this respect this year.”

He is planning to intensify his cost cutting campaign with the aim of beating targets set last November. He has implemented staff cuts, reviewed the bank’s operations in Central and Eastern Europe and raised €7.5bn in a rights offering to meet capital targets set by the European Banking Authority.

UniCredit’s financial position has strengthened to the point now that it is no longer reliant on loans from the European Central Bank. Ghizzoni says he is not concerned that the ECB is unlikely to extend a third round of unlimited loans to the region’s banks, as they would now only be needed in case of an unexpected ‘catastrophic’ scenario.

UniCredit has liquidity because it has good access to the wholesale market, the chief executive said. “Things are moving in the right direction. A lot of governments have taken the proper decisions in terms of debt, Italy included.” UniCredit borrowed €26bn from the ECB’s two longer-term refinancing operations.

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