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Report: Europe needs stronger banks, UniCredit CEO says

Europe needs stronger banks and there should be more pan-European credit institutions able to serve local companies, Jean-Pierre Mustier, CEO of UniCredit SpA, said in an interview with Handelsblatt published Dec. 20.

Nevertheless, he does not see any mergers for his own organization in the next few years. UniCredit's restructuring plan will be completed by the end of 2019, and until then the Italian bank will be focused mainly on organic growth, Mustier told the German newspaper.

Any potential merger or acquisition would not depend on financial issues but rather on whether it would be useful for clients and whether it is a good cultural match for the organization, according to the CEO.

Mustier does not believe that the 2019 return on equity target of 9% is too ambitious, as the cost reduction at UniCredit should bear fruit in the next two years. The further reduction of nonperforming loans and the expected interest rate hikes in Europe in the second half of 2019 should also help the bank reach its ROE goal, he said.

UniCredit aims to reduce its NPLs to €17 billion by the end of 2019, from €33 billion at the end of September.