UniCredit chief executive Federico Ghizzoni resigned today after admitting the bank needs a new boss.
Ghizzoni, who became CEO in 2010, came under pressure to resign after facing fierce shareholder discontent over the bank's falling share price and low profitability.
Last week, shareholders accounting for 15 per cent of the bank approached the bank's chairman Giuseppe Vita to take measures to replace Ghizzoni and improve the performance of the bank.
UniCredit’s profit for the first quarter plummeted by a fifth to €406m while revenue fell to €5.48bn in the first three months from €5.75bn a year earlier.
Earlier this month, UniCredit reported that provisions for non-performing loans (NPLs) fell to €755m in the first quarter, down from €980m during the same period a year earlier.
In November last year, it was revealed that the bank is to cut 18,200 jobs by 2018 as part of its cost cutting measures.
The bank has put on hold its deal with Santander to merge their fund management businesses as UniCredit looks for a new boss.
Sources told Reuters that the bank aims to appoint a new CEO at a board meeting on 9 June.
In a statement, UniCredit said: "At today's session, the UniCredit board of directors and Federico Ghizzoni acknowledged that the conditions are now such that it is time for a change at the top of the Group. Federico Ghizzoni has expressed his willingness to work with the chairman to find an agreement to terminate his contract to be submitted to the relevant bodies for approval, in full compliance with the applicable laws and regulations.
"Ghizzoni has agreed to stay in office until such time as his successor is appointed and to provide all necessary support during the transition stage."