Shareholders of Italian banking group UniCredit have given the go-ahead to the bank's €13bn rights issue plan.

The rights issue, announced by the bank last month, will be used to shed €17.7bn worth of gross bad loans from the bank’s balance sheet and is expected to be completed in the first quarter of 2017.

UniCredit announced the rights issue and plans to axe 14,000 jobs last month as part of a broader strategy to boost profitability. In July 2016, the bank sold minority stakes in its Polish subsidiary Bank Pekao and its online bank FinecoBank as part of this strategy.

Last month, it agreed to offload a 32.8% stake in Bank Pekao to local insurance group PZU and a local development fund.

“The Rights Issue is one of the pillars of the 2016-2019 Strategic Plan and will allow a significant strengthening of the Group's capital ratios, so as to be in line with the best European systemic banks,” the banking group said.