Unicredit readies bad loan sales of $18.8 billion

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  • Italian Prime Minister Paolo Gentiloni, right, gives his first speech as premier at the lower house where he will later face a confidence vote, in Rome Tuesday, Dec. 13, 2016. Paolo Gentiloni, a Democrat formerly serving as foreign minister, formed Italy’s new government Monday, keeping several key ministers from the coalition of Matteo Renzi, who resigned last week. At left is Finance minister Pier Carlo Padoan, at center is Foreign minister Angelino Alfano. (AP Photo/Alessandra Tarantino)

    Italian Prime Minister Paolo Gentiloni, right, gives his first speech as premier at the lower house where he will later face a confidence vote, in Rome Tuesday, Dec. 13, 2016. Paolo Gentiloni, a Democrat formerly serving as foreign minister, formed ... Italy’s new government Monday, keeping several key ministers from the coalition of Matteo Renzi, who resigned last week. At left is Finance minister Pier Carlo Padoan, at center is Foreign minister Angelino Alfano. (AP Photo/Alessandra Tarantino) (The Associated Press)

  • An view of the entrance of theUniCredit tower at the Porta Nuova business district in Milan, Italy, Tuesday, Dec. 13, 2016. Italy's largest bank, UniCredit, said Tuesday it will unload 17.7 billion euros ($18.8 billion) in soured loans, raise billions in new money and shed thousands of jobs as it seeks to re-launch the company under new management. (AP Photo/Luca Bruno)

    An view of the entrance of theUniCredit tower at the Porta Nuova business district in Milan, Italy, Tuesday, Dec. 13, 2016. Italy's largest bank, UniCredit, said Tuesday it will unload 17.7 billion euros ($18.8 billion) in soured loans, raise ... billions in new money and shed thousands of jobs as it seeks to re-launch the company under new management. (AP Photo/Luca Bruno) (The Associated Press)

  • An external view of the UniCredit tower at the Porta Nuova business district in Milan, Italy, Tuesday,Dec. 13, 2016. Italy's largest bank, UniCredit, said Tuesday it will unload 17.7 billion euros ($18.8 billion) in soured loans, raise billions in new money and shed thousands of jobs as it seeks to re-launch the company under new management. (AP Photo/Luca Bruno)

    An external view of the UniCredit tower at the Porta Nuova business district in Milan, Italy, Tuesday,Dec. 13, 2016. Italy's largest bank, UniCredit, said Tuesday it will unload 17.7 billion euros ($18.8 billion) in soured loans, raise billions in ... new money and shed thousands of jobs as it seeks to re-launch the company under new management. (AP Photo/Luca Bruno) (The Associated Press)

Italian bank Unicredit has announced the disposal of 17.7 billion euros ($18.8 billion) in nonperforming loans as it seeks to improve its capital position under new management.

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Italy's largest bank by assets announced Tuesday that the loans will be offloaded in two separate transactions in the first half of 2017 to new independent entities in which Unicredit will hold a minority interest.

The move to reduce the bank's risk profile emerged in a new strategic plan that includes another capital increase in the first quarter of next year and personnel cuts of 6,500 jobs by 2019. The bank forecast net income of 4.7 billion euros by 2019.

Unicredit CEO Jean Pierre Mustier says the "decisive actions" to dispose of the bad loans seeks "to improve and support recurring future profitability."