VIENNA (Bloomberg) - UniCredit SpA, Italy's biggest bank, plans to cut 9,000 jobs, or five percent of its workforce, after making $61 billion of acquisitions during the past three years.

The reductions will be in Italy, Germany and Austria as the company moves its business east following last year's takeover of Rome-based Capitalia SpA and the 2005 purchase of Munich- based HVB Group, the Milan-based company said today in Vienna. The bank fell as much as 4.9 percent in Milan.

CEO Alessandro Profumo is struggling to increase earnings after trading losses and credit-market writedowns caused a 51 percent drop in first-quarter profit. The bank is adding 11,500 staff and opening 1,300 branches in central and eastern Europe over the next two-and-a-half years as major economies slow following the collapse of the US sub-prime-mortgage market.

"Profumo's strategy is right in the long term," said Karim Bertoni, who helps manage $27 billion, including UniCredit shares, at Banque Syz & Co. in Geneva. "In the short term it might be difficult."

UniCredit expects annual revenue growth of 6.7 percent through 2010, with an increase of 19 percent a year in central and eastern Europe. Since its purchase of Poland's Pekao SA in 1999, UniCredit has opened offices in countries including Russia, Turkey, Hungary and Kazakhstan.

The bank is forecasting stronger growth in central and eastern Europe than in the western part of the continent.

The eastern and central European businesses accounted for 20 percent of the company's total revenue last year.

The lender fell 17.6 cents, or 4.3 percent, to 3.95 euros in Milan, giving the company a market value of about 52.8 billion euros ($83 billion).

The company has dropped 31 percent this year, in line with the slide in the 59-member Bloomberg Europe Banks and Financial Services Index, which declined 4.3 percent yesterday.

Many of UniCredit's job cuts will be related to the purchase of Capitalia, and the other reductions will be made at the "corporate centre," the company said, without being more specific.