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UniCredit shareholders vote to raise $14billion

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UniCredit shareholders vote to raise $14billion
File photo: Giuseppe Cacace/AFP
17:26 CET+01:00
Shareholders at Italian bank UniCredit, which is undergoing a major strategic review, on Thursday voted in favour of plans to raise billions of euros to strengthen the struggling lender's capital base.

The move comes after a nightmare year for Italy's banking sector, notably for Monte dei Paschi di Siena (BMPS), the world's oldest bank, which is set to be nationalized after a failed recapitalization bid in December.

UniCredit itself, Italy's biggest bank, saw its share price nearly halved last year although it managed to claw back 25 percent of its value over the past three months, particularly after the unveiling of a new strategic plan in December.

Plans to recapitalize the bank to the tune of 13 billion euros ($13.8 billion) were backed almost unanimously by shareholders meeting in Rome, with new chairman Jean-Pierre Mustier saying it would take place before March 10th.

Mustier, who took over in July, has spearheaded a major strategic review that has so far involved selling off assets to strengthen the bank's capital base.

Press reports said UniCredit could offer the shares at a large discount, which could see them priced at between 1.2 euros and 1.3 euros, compared with Thursday's price of 2.6 euros.

The bank, which was one of the worst performers in European bank stress tests, announced the move last month, also saying it would slash 14,000 jobs by the end of 2019 as part of a cost-saving drive.

Investor confidence in Italy was shaken by the collapse of Matteo Renzi's government late  last year, although the situation eased late last month after the government approved a 20-billion-euro bailout plan to rescue the country's struggling banks.

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