UNICREDIT S.P.A. 
MILAN (Reuters) - UniCredit (>> UniCredit SpA) said on Thursday that its record 13 billion euro (10.92 billion pounds) share issue had been almost fully subscribed, a boost for new boss Jean-Pierre Mustier's strategy to relaunch Italy's biggest bank.
In a statement, the bank said the cash call had been 99.8 percent subscribed. Unexercised rights will be offered on the Italian bourse from Feb. 27.
The success of the country's biggest corporate cash call marks an important step in Italy's efforts to restore its banking system to health after a harsh recession saddled lenders with 356 billion euros in problem loans, equal to one fifth of economic output.
UniCredit will use the money to rebuild capital after a balance-sheet clean-up led to a 13.6 billion euro fourth-quarter loss. It booked 10 billion euros in loan writedowns in the period to pave the way for a 17.7 billion euro bad debt sale.
UniCredit hired Mustier in July to address persistent concerns about its weak capital and large bad loan pile.
UniCredit is Italy's only global systemically important bank, but its capital ratios have lagged behind those of rivals despite having raised 14.5 billion euros in three successive share issues since the start of the financial crisis in 2008.
The 55-year-old French investment banker immediately started selling assets such as a stake in online banking unit FinecoBank (>> FinecoBank Banca Fineco SpA), Poland's Bank Pekao (>> Bank Pekao SA) and asset manager Pioneer, raising more than 8 billion euros in this way.
"UniCredit's old strategies relied on size and growth but the new one is different. Much of the focus is on cutting costs and risks, with growth a secondary objective ... we applaud this approach," Berenberg analysts said this week in upgrading the stock to "buy".
"What is clear from the new strategy is that revenue growth will be difficult to achieve. ... For us, cutting costs and risk is the key to generating shareholder value," they said.
Under a new business plan unveiled in December, UniCredit is targeting a 4.7 billion euro net profit in 2019 despite an average annual revenue growth of just 0.6 percent between now and then.
Mustier, who took a 40 percent pay cut as he unveiled plans to slash 14,000 jobs by 2019, targets recurring annual costs savings of 1.7 billion euros at the end of the period as banks grapple with low interest rates and regulatory constraints that curb revenues.
($1 = 0.9459 euros)
(Reporting by Valentina Za, editing by Stephen Jewkes and Susan Fenton)
