Italian lender UniCredit appointed a new CEO for its Bank Austria to oversee restructuring of its struggling retail business. The firm announced on Monday that Robert Zadrazil, 45, Bank Austria's head of private banking, will replace CEO Willibald Cernko, 59, on March 1.

Reuters has reported that UniCredit, which is the biggest bank in Italy in terms of assets, plans to restructure its retail business in Austria. It aims to save cost of operations by 300 million euros or $325 million by 2018. The restructuring plan also requires the firm to shrink its number of branches from almost 200 to only 120 by 2018. Most of the cost cutting would be done through eliminating jobs.

Bank Austria handles most of the Vienna-based lender's operations in Central and Eastern Europe. The Austrian business of UniCredit reported a pre-tax loss amounting to 41 million euros in the first three quarters of 2014.

"The resignation signals a break with past management, which obstructed the needed restructuring of Bank Austria," said Fidentiis Equities analyst Fabrizio Bernardi in a report by Bloomberg News. "A reshuffle could speed up cost cutting at the unit."

"We expect the new CEO to give impetus to the restructuring and relaunch of Bank Austria that was announced last December," Said UniCredit CEO Federico Ghizzoni in a statement posted on Money.pl. "This strategic plan seeks to combine significant cost reductions with major investments for growth, confirming UniCredit's present and future role as a strong European commercial bank, able to support our customers and the economies of the countries where we operate."

Restructuring the consumer business of Bank Austria means cutting a third of the branches to boost profitability. This is UniCredit's decision after considering other options, which included the sale of the unit. Cernko developed the restructuring plans to prevent UniCredit's initial plan to sell its Austrian retail business.