Natixis points to rules on risk as it cuts jobs

FRENCH investment bank Natixis plans to cut around 700 jobs, or 4.5% of its workforce, as part of a costsaving drive as Europe’s lenders adapt to a tough economic environment and new international curbs on risk-taking.

Like larger rivals BNP Paribas and Societe Generale, Natixis is looking for a new strategy and to cut costs as eurozone 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 yesterday that the hundreds of potential job losses, which were reported by Reuters on Tuesday, would prioritise redeployment of staff within the company and that any departures would be voluntary. Talks with unions are due to begin next month, 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 cen- tral bank cut its third-quarter growth estimate to just 0.1%, while the INSEE statistics institute forecast the unemployment rate would stabilise at 11% at the end of this year after two and a half years of rises.

The Socialist government, struggling to fulfil its pledge to cut dole queues and revive growth, said last week it could use new labour rules to block a plan by telecoms firm AlcatelLucent to lay off 900 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 effect 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 specialise.”