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French bank Natixis plans to cut 700 jobs in savings drive

The logo of French bank Natixis is seen in Paris February 15, 2008. REUTERS/Vincent Kessler
The logo of French bank Natixis is seen in Paris February 15, 2008. REUTERS/Vincent Kessler

By Lionel Laurent

PARIS (Reuters) - French investment bank Natixis plans to cut around 700 jobs, or 4.5 percent of its workforce, as part of a cost saving drive as Europe's lenders adapt to a tough economic environment and new global curbs on risk-taking.

Like larger rivals BNP Paribas and Societe Generale , Natixis is looking for a new strategy and to cut costs as euro zone crisis fears dissipate and investors focus on banks' ability to return cash and grow profitably.

The cuts would be the latest in a series of restructuring moves at France's youngest and smallest listed investment bank, which narrowly avoided collapse during the financial crisis and sought closer ties with retail parent group BPCE.

Natixis said on Wednesday that the hundreds of potential job losses, which were reported by Reuters on Tuesday, would prioritize redeployment of staff within the company and that any departures would be voluntary. Talks with unions are due to begin in mid November, it said.

The bank blamed the "economic and regulatory context", at a time when the French economy is stagnating and when tougher global rules on risk-taking by banks are set to take effect.

Earlier this month, France's central bank cut its third-quarter growth estimate to just 0.1 percent, while the INSEE statistics institute forecast the country's unemployment rate would stabilize at 11 percent at the end of this year after 2-1/2 years of rises.

The Socialist government, struggling to fulfill its pledge to cut dole queues and revive growth, said last week it could use new labor rules to block a plan by telecoms firm Alcatel-Lucent to lay off 900 French workers.

While French banks have also announced waves of job cuts over the past few years, including the closure of mortgage lender Credit Immobilier de France, there has been little popular or political sympathy given the lasting impact of the financial crisis on public opinion.

Natixis' management has already presented its plans to staff representatives, with the cuts affecting most business lines including equity brokerage, advisory and global transaction banking, according to union sources and company documents obtained by Reuters.

The cuts are expected to occur over the next two years, the sources said, and will mostly hit France.

"Natixis needed to improve efficiency, more than other banks," said Yohan Salleron, a fund manager at Mandarine Gestion. "While rivals have overhauled entire departments at their investment bank, Natixis has yet to really specialize."

Natixis has already gone through a first wave of restructuring and sold swathes of risky assets after it was bailed out by its cooperative retail parent during the 2008 financial crisis.

Natixis took one step towards a new structure earlier this year when it said it would simplify its finances by shedding a 20 percent stake in BPCE, paving the way for higher dividends in the future.

Natixis shares slipped 0.7 percent, underperforming a flat STOXX Europe banks index <.SX7P>. The stock has soared 85 percent this year, making it the third-best-performing bank stock in Europe and the best-performing French bank stock.

(Editing by Dominique Vidalon, James Regan and Mark Potter)

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