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In 2006 we realigned our business segment structure to reflect the Group structure. This organisational integration also enables us to implement the business model which focuses on customer needs – a measure which had great implications for our Austrian customer business. Instead of defining business segments on the basis of traditional product-related categories as before, we combined related customer segments to which we apply a specific customer service approach. The Retail Division features a large number of low-volume transactions with recurrent customer needs, so that a cost-efficient approach with a high standardisation level can be applied. We also more precisely defined business segments characterised by product competencies with a view to specialisation and more efficient integration within UniCredit Group. In this way we aim to enhance our competitiveness by using the advantages offered by economies of scale and the Group network. To this end, we transferred Private Banking & Asset Management operations from the previous Private Customers business segment to enable it to focus exclusively on the market’s top segment whilst benefiting from the standing and expertise of Pioneer Investments. The Markets & Investment Banking Division is conceived as a closely-knit unit with a Group-wide presence, enabling it to operate effectively on international financial markets.
The previous SMEs Austria business segment has been divided into the new Retail and Corporate Divisions. 70,000 business customers who can best be served with an "industrial approach" have been transferred to the new Retail Division. 17,000 medium-sized companies have been transferred to the Corporates Division based on quantitative (turnover of € 3 m) or needs-oriented criteria, as they now seek solutions which were previously limited to and developed for large corporate customers.
The transfer of the top customer segment and the inclusion of the SMEs segment which is characterised by disproportionately low profitability levels results in high cost intensity and large credit volume for the Retail Division. We have prepared a comprehensive package of measures to improve profitability and have for this purpose made restructuring provisions. This reflects our efforts to significantly boost profitability over and above the breakeven point by increasing revenues and lowering costs.