Italy’s biggest bank expects to report €11.8bn loss

Italy's biggest bank UniCredit warned on Monday it expects to report a loss of 11.8 billion euros for 2016, as the troubled lender scrambles to launch a massive recapitalization effort.

Italy's biggest bank expects to report €11.8bn loss
File photo of the UniCredit logo at its headquarters: Giuseppe Cacace/AFP

UniCredit saw its share price nearly halved last year, though 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.

The 11.8 billion euro ($12.6 billion) loss includes 12.2 billion euros' worth of “negative non-recurring items” that were disclosed in December and a further 1.0 billion euros in additional one-off losses, the bank said in a statement.

Without these, the net result for 2016 would have been positive, the bank said. Preliminary results will be published on February 9th.

Earlier this month shareholders approved a rights issue aimed at raising 13 billion euros.

New chairman Jean-Pierre Mustier has said it would take place before March 10th, but press reports suggest it could be launched as early as next week, with a view to completing it by the end of February.

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.

UniCredit has said it will shed around 14,000 jobs by the end of 2019 as part of a cost-cutting drive, estimating this would save 1.1 billion euros.

Italy's banking sector has suffered a nightmare year, 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.

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.

By Celine Cornu

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Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.