MILAN (Reuters) - Italy’s BPER Banca said it targeted a 450 million euro profit ($512 million) in 2021 by focusing on wealth management and insurance products to boost fees and offset weak growth in its interest income.
Italy’s sixth-largest bank also aims to shed 1,300 jobs under a three-year plan and shut about 230 branches out of a network of nearly 1,500 to cut operating costs by 2.6 percent annually.
BPER, headquartered in the northern Emilia Romagna region,
made net income of 402 million euros last year.
It aims to grow fees on average by 3.6 percent a year while the income from its lending activity, or net interest margin, is projected to increase by just 0.7 percent.
The new plan comes after the bank this month agreed to buy the banking unit of its top shareholder Unipol for 220 million euros in a deal that allowed it to shed 1.3 billion euros in bad loans.
BPER said it would further cut the weight of soured loans over total lending to below 9 percent in 2021 from 11.6 percent at the end of last year.
BPER Banca targets an average dividend payout of around 25 percent over the plan’s period, it added. ($1 = 0.8794 euros)
Reporting by Giulio Piovaccari, editing by Valentina Za and Emelia Sithole-Matarise