UniCredit on Wednesday night approved plans to sell €13bn worth of new shares at a 38 per cent discount, as Italy’s largest bank battles to shore up its capital position.

The rights issue, which will see shareholders receive 13 new shares for every five they own, has been fixed at €8.09 a share, a 38 per cent discount from the theoretical ex-rights price (Terp) at Wednesday’s close.

The capital raising is its third significant cash injection since 2008 and is close to UniCredit’s €16.45bn market value

UniCredit emerged as the sixth weakest bank in stress tests of the eurozone’s biggest lenders carried out by the ECB last summer.

Under the leadership of new chief executive Jean-Pierre Mustier, UniCredit plans to close down branches, cut thousands of jobs and get rid of its bad loan portfolio in an effort to strengthen the bank and reassure the regulator.

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