ITALIAN lender Unicredit will tap up investors for €7.5bn (£6.4bn) in cash as it scrambles to pass a new round of European stress tests.
The bank’s strategic committee will this morning unveil the recommendation to meet requirements by raising money rather than holding an asset fire-sale, making it Europe’s first bank to formally announce its capital-raising plan in response to regulators’ demand that EU banks find €106bn in new cash.
Rivals could now feel under pressure to unveil their own plans quickly to avoid missing out on limited investor appetite for bank equity.
As part of its strategic review, Unicredit will also announce that it is closing its in-house equity cash brokerage in the City. The move will cost around 150 jobs, leaving the bank with just under 1,000 staff in London.
The lender will also reveal plans to offload 10 per cent of its assets, but not over the same short timescale as the capital-raising, which must be completed by the middle of next year.
Much of the new capital is expected to be raised in Germany and Austria, where Unicredit has a large presence.
Its strategy review will see the bank refocus on growing markets such as Russia, Poland, Turkey and the Czech Republic.
City A.M. understands that Unicredit is being advised in the capital-raising by a syndicate of banks made up of its own in-house team, Bank of America Merrill Lynch and Mediobanca.