SocGen to cut 700 jobs in US, Asia
Paris, December 3, 2011
French bank Societe Generale is to cut 700 jobs at its American and Asian operations as it pulls back on U.S. dollar lending to cut debt and strengthen its balance sheet, two trade-union sources said.
The latest sign of retrenchment at French banks comes as the eurozone debt crisis reaches boiling point and and as Europe's banks take fresh measures to restore investor confidence and meet tougher capital targets by mid-2012.
'They (SocGen) gave in New York a figure of 700 job cuts across the Americas and Asia,' said Michel Marchet, a Paris-based CGT union representative.
France's second-biggest bank by market value has said it will sell assets to wean itself off frozen interbank lending markets and warned last month that 'hundreds' of jobs would go, without being more precise.
French banks are among Europe's most dependent on short-term funding and the job cuts are the latest sign they are having to scale back their global ambitions as regulators raise capital requirements and liquidity dries up.
'Although the world's major central banks have moved to provide access to cheaper and more plentiful dollar funding, the situation remains challenging for French banks because U.S.
money-market funds are allowing their exposure to roll off,' a report by Fitch Ratings said on Friday.
France's biggest bank by market value, BNP Paribas , said last month it would cut over 1,700 jobs at its CIB (corporate and investment bank) and asset-management divisions.
The head of SocGen's corporate and investment banking division, which employs some 12,000 people, sent a message to employees on Nov. 30 obtained by Reuters saying the bank had 'reviewed' its activities in the Americas and Asia-Pacific.
'We are cutting our leverage, our dollar-financing needs and our operating costs,' Michel Peretie wrote in the memo.
A second Paris-based trade union source who did not wish to be named said: 'We've been given the number, 700 people, in New York and in Asia.'
A Societe Generale spokeswoman declined to comment. The bank was among the first to be hit this summer by the pullback of U.S. money markets from European bank funding, which spilled over into a share-price slide that spread across the sector.
Chief Executive Frederic Oudea, who rose to the top spot after the Jerome Kerviel rogue trading scandal almost brought the bank to its knees in 2008, has said SocGen will scrap its dividend and slash bonuses this year to preserve capital.
French bank layoffs appear so far to be at the lower end of the job-cuts scale, especially compared with Unicredit's plan for 6,150 cuts or Bank of America's 30,000 cuts. The bulk of their cuts are seen coming from countries outside the more regulated French market.
SocGen shares were up 8 percent at 18.91 euros on Friday, outperforming a 4.3 percent gain in the European sector, but so far this year the shares have 53 percent compared with a 34 percent sector drop.
The stock is valued at a price-to-book ratio of 0.29, compared with a sector average of 0.57.-Reuters