Unicredit – the Italian bank that is selling Pioneer Investments to Amundi – said it plans to axe 14,000 jobs over the next two years and sell off non-performing loans to bolster its stability.

The bank said the redundancies would save €1.1 billion in personnel costs.

A total of €17.7 billion of non-core loans will be offloaded to US fund firms, Fortress Investment Group and Pimco.

Unicredit’s chief executive Jean Pierre Mustier has had to impose tough measures because the bank’s non-performing loans have eaten away its capital base.  After the restructuring, Unicredit’s core equity tier one ratio would increase 200 basis points to a 12.5% by 2019.

"We are taking decisive actions to deal with our legacy issues to improve and support recurring future profitability to become one of Europe's most attractive banks,” said Mustier.

Unicredit also said yesterday that it would hold Italy’s largest ever rights issue of €18 billion, which should allow dividends to recommence by 2019.

After the announcement the bank’s shares were up by 15.9%.

This week Unicredit confirms the sale of Pioneer to Amundi for €3.5 billion.

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