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Italian bank UniCredit released earnings results today, and its finances are in terrible shape.Net losses amounted to €10.64 billion ($14.54 billion), after net profits of €334 million ($456 million) a year ago.
The bank has already said it will need to raise €7.5 billion ($10.3 billion) from shareholders in order to shore up dangerously low capital reserves.
Reuters reports that the company is also expected to cut 5,000 jobs.
Shares of the bank’s stock are falling today.
The Italian bank has been hard-pressed to stay afloat amid tightening liquidity conditions in the eurozone. At the same time, it will be forced to recapitalize to adhere to the 9% core capital requirement for EU banks by next June.
It is unclear whether UniCredit will be able to do this without seeking aid from the Italian government and perhaps even the European Financial Stability Facility, amounting to a de facto nationalization of some of the bank’s assets.
Reuters reports that UniCredit is the most globally exposed bank, with operations in 22 different countries. It is also on the list of systematically important financial institutions—banks that are considered “too big to fail.”
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