Wednesday 7 August 2019 10:41 am

Unicredit cuts 2019 revenue guidance despite profit jump

Unicredit slashed its revenue target for the full-year this morning, as interest rate headwinds and a global slowdown takes its toll on Italy’s largest bank.

Revenue guidance for the year has been cut to €18.7bn (£17.2bn), falling from a previous estimate of €19.8bn.

Read more: Commerzbank now warns its 2019 profit target looks ambitious

UniCredit blamed “the prevailing environment with [interest] rates expected to be lower for much longer” for the cut in its revenue guidance.

The comments echo concerns from across Europe’s banking industry of weaker earnings in the wake of trade disputes and the threat of lower interest rates.

However, the lender also revealed a sharp rise in profit this morning following the sale of its stake in FinecoBank.

Net profit hit €1.9bn in the last quarter, soaring 81 per cent when compared with the same three-month period in the previous year.

The firm’s share price, which has crashed 30 per cent in the last 12 months, tumbled four per cent to €9.86 in trading this morning.

Last month fears of a drastic job cull at UniCredit emerged, rocking Europe’s banking sector just weeks after its rival Deutsche Bank swung the axe on its own staffing operations.

Read more: Speculation mounts over potential job cuts at Unicredit

Italy’s largest bank is understood to be weighing up a move to slash 10,000 jobs as part of a new cost-cutting overhaul.

The severe measure, which would mean a 10 per cent cut to its global workforce, marks the latest sign of trouble within Europe’s embattled banking sector, which has been hit by lower interest rates and rising market volatility over recent years.

Sources told Bloomberg, which first reported the story, that final numbers are under review but dismissals would involve staff in Italy as well as other countries.