Italian banking major UniCredit is set to stop offering basic banking services in its Asia Pacific units for its European clients, Reuters has reported. 

The bank’s decision is aimed at streamlining its international operations and cutting down costs.

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As part of the plan, the lender will close its offices in Tokyo, Shanghai and Singapore and leave only one branch operational in Hong Kong, a source told the publication. 

Responding to the news agency’s request for comment, UniCredit said: “We will … no longer offer account banking and other banking services to the Asia Pacific region subsidiaries of clients located in our core coverage regions.”

The Italian lender had communicated its decision to its employees in China at the start of the week, another source said. 

UniCredit said it will offer corporate services such as transaction and foreign exchange through correspondent banks.

The branch in Hong Kong will carry out the job of supporting Asian corporate and financial institution customers in their investments and business in Europe.

The move will also result in the closure of representative offices in Mumbai, Hanoi, and Seoul. A branch in Beijing will remain operational. 

UniCredit’s decision is part of the wider plan announced by CEO Andrea Orcel in December 2021. 

The bank plans to distribute at least €16bn through cash dividends and share buybacks to investors between 2022-2024. 

It also plans to invest €2.8bn to improve its digital and data infrastructure.

In the same month, it was also reported that UniCredit will lay off 950 full-time roles in its home market, by retiring employees.