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Dec 16, 2008

Italy's Pop Milano targets some 400 job cuts

Banca Popolare di Milano aims to cut its workforce nearly 5 percent to reduce costs and improve efficiency, the Milan-based bank said on Tuesday, following approval last week of long-awaited governance changes.

The company, which employs about 8,600 people, said in a statement that it is targeting about 400 job cuts based on a voluntary package and that Director General Fiorenzo Dalu will start discussions with trade unions.

"The target is to reduce the total number of employees at the three commercial banking units of the Bipiemme group (Banca Popolare di Milano) by about 400," it said in the statement.

Trade unions have a lot of clout in Pop Milano, a co-operative bank, and their influence has been seen by analysts as an obstacle to reducing its above-average cost base.

Under pressure by trade unions, the bank made a U-turn on a nearly-agreed merger with peer Banca Popolare dell'Emilia Romagna in June last year.

On Dec. 13 shareholders approved governance changes at the bank, including a reduction in the board's size and a measure on voting thresholds that could ease merger approval. The changes were in line with those proposed by the Bank of Italy.

The shares rose on Tuesday 4.01 percent to 4.1550 euros, the highest closing level since Nov. 17, outperforming the 0.91 percent rise of the DJ Stoxx index of banks .

Source : Reuters
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