* Board appoints retail hed Nicastro as sole general manager
* Ermotti's departure puts pressure on Chairman Rampl
* Ermotti to quit as bank too retail-focused -source
* Management revamp first key decision for new CEO Ghizzoni
(Releads with Ermotti leaving, adds blow to chairman, strategic outlook)
By Lisa Jucca and Stefano Bernabei
MILAN/ROME, Oct 26 (Reuters) - UniCredit SpA's top investment banker Sergio Ermotti will leave the bank after being passed over in a management reshuffle, the first casualty of a revamp that followed the appointment of a new chief executive.
UniCredit's board on Tuesday named retail chief Roberto Nicastro as sole general manager at Italy's No.1 bank -- a move which paved the way for the departure of Ermotti, a former Merrill Lynch executive well known in international financial circles.
"Ermotti has agreed, until his successor is appointed and in order to assure a smooth transition, to continue to head the group's corporate and investment banking," UniCredit said in a statement.
The revamp is the first key decision for new Chief Executive Federico Ghizzoni, appointed last month after former boss Alessandro Profumo quit in a row with investors.
The board's decision puts pressure on Chairman Dieter Rampl, who had been in favour of naming Ermotti as general manager next to Nicastro, liked by some Italian shareholders.
"In theory he (Rampl) must think about also leaving if Unicredit turns into an Italian-dominated retail bank," a source within the bank told Reuters. "But him leaving the bank is not today's topic."
Nicastro, 45, had headed UniCredit's vast retail network since 2007. He had been a rival for Profumo's job when Ghizzoni was appointed.
One of the sources said Ermotti resigned because he did not like the new retail-banking focus spearheaded by Ghizzoni.
"It is a decision of staying one of the big players in investment banking or becoming little more than a big Italian savings bank," another company source said.
The investment bank, blamed for some of UniCredit's excesses in the run up to the credit crisis, posted a profit before tax of 761 million euros ($1.1 billion) in the second quarter.
Its larger retail unit, which requires less bank capital under new Basel III capital rules, had a pretax profit of 173 million euros.
Swiss-born Ermotti joined UniCredit at the end of 2005 after nearly 18 years at Merrill Lynch. He became deputy-CEO in 2007.
Shares in UniCredit closed down 0.3 percent at 1.884 euros, in line with the STOXX Europe 600 banking index. (Additional reporting by Gianluca Semeraro and Ian Simpson in Milan, with Christian Kraemer in Munich and Arno Schuetze in Frankfurt; Writing by Lisa Jucca and Ian Simpson; Editing by David Cowell and David Holmes) ($1=.7166 Euro)