French banks did not break rules with NF account closures: CB
Societe Generale shares climb after cost-cutting plan Banks failed to offer fuller explanations
PARIS: French bank Societe Generale and its Credit Du Nord subsidiary did not violate banking regulations in shutting down the accounts of the far-right National Front party, the Bank of France said yesterday. National Front chief Marine Le Pen last week accused the banks, as well as HSBC which closed her personal account, of launching a “banking fatwa” to silence her party.
The banks declined to offer fuller explanations for the account closures but said they had acted within regulatory requirements. “The closure of the National Front’s accounts by the banks does not appear to reflect wrongdoing vis-a-vis their regulatory obligations, and leaves no reason to believe they acted with discrimination,” the central bank said.
Le Pen said she would file a legal complaint this week. “It will be up to the court to decide,” Le Pen said in an interview on BFM TV, adding that the account closures prevented the party from operating properly. The Bank of France revealed that the National Front had held 16 accounts with Societe Generale until Sept. 25, as well as a deposit account with Credit Du Nord on which two months notice was given in late October.
That appeared to contradict Le Pen who last week said the central bank had ordered Credit Du Nord to manage an account for the party and that the bank had refused to process cheques and credit card payments. Le Pen is smarting from defeat in this year’s presidential and parliamentary elections, during which she accused French banks of being politically biased for not lending to her campaigns.
Shares in Societe Generale climbed yesterday after the French bank unveiled a strategic plan that will see it shutter 15 percent of its branches in its home market and cut even more jobs. While the plan aims to boost profits, in the short term France’s third-largest bank will need to book a charge of 400 million euros ($476 million) to implement the restructuring. It announced it will also book against fourth quarter earnings 170 million euros for an exception tax levied by the French government.
Societe Generale’s shares rose 0.8 percent in early trading, while the Paris CAC 40 index edged 0.05 percent higher. The strategic plan through 2020 unveiled late Monday aims to make 1.1 billion euros in overall savings, while at the same achieving an increase in revenue of 3 percent per year.
It targets raising its net profit per share to 6.5 euros in 2020, compared to 4.3 euros in 2016. Societe Generale’s chief executive Frederic Oudea said the bank aims to remain a trusted partner to clients and is committed to a positive transformation of societies and economies.
“Our ambition is therefore to generate superior, profitable and sustainable growth,” he said in a statement. The bank announced that will see it close 300 of its branches in France, and cut an additional 900 jobs on top of the 2,500 announced since the beginning of 2016. With ultralow interest rates set to continue in Europe, Societe Generale expects growth of more than one percent in France. However it is targeting more than five percent growth in its businesses outside France. In particular it aims to become the top foreign bank in Russia. —Agencies