On Air Now

Upcoming Shows

Program Schedule »

Tune in to Listen

1440 AM Green Bay, WI

Weather

Current Conditions(Green Bay,WI 54303)

More Weather »
32° Feels Like: 32°
Wind: S 3 mph Past 24 hrs - Precip: 0”
Current Radar for Zip

Today

Partly Cloudy 56°

Tonight

Showers Late 47°

Tomorrow

Showers 65°

Alerts

  • 0 Severe Weather Alerts
  • 0 Cancellations

BNP Paribas eyes 1 billion euro overhaul to cut costs

By Lionel Laurent

PARIS (Reuters) - French bank BNP Paribas plans to spend 1 billion euros ($1.3 billion) over three years to pare down its businesses in response to lackluster growth in Europe, according to a union source.

Analysts and investors expect France's largest bank to lay out its new strategy in the coming months after a rocky year spent selling assets and cutting jobs.

Banks across Europe are shrinking to boost defenses against a weakening economy and comply with tougher global regulations.

Germany's Deutsche Bank and Switzerland's UBS have recently announced job cuts while Britain's Barclays is preparing a new strategic plan.

BNP and domestic rivals Societe Generale and Credit Agricole have so far focused their restructuring efforts on investment-bank activities hardest hit by the financial crisis, but are now expected to turn to activities like retail banking exposed to weak European growth.

BNP's management outlined the overhaul to staff representatives on January 16 - promising to cut layers of management and simplify decision-making - but stopped short of any details on jobs or how much money would be saved, a source from the SNB union told Reuters.

"The plan, called 'Simple & Efficient', will run through 2015," the source said. "Over 1 billion euros will be spent on planned changes that will potentially affect all of BNP's business lines."

Shares of BNP were up 1.5 percent, to 46.33 euros, the fifth-best performer on the STOXX Europe 600 banks index <.SX7P>.

"One billion is a pretty significant number," said Yohan Salleron, fund manager at Mandarine Gestion. "There is going to be very weak growth at BNP's domestic retail operations going forward...This efficiency plan should help counter it."

A BNP spokesman declined to comment. The news was earlier reported by investment newsletter Agefi, which said BNP might outline the plan at its next earnings announcement on February 14.

"(BNP's plan) is positive...We are in an environment of weak revenue growth," said Natixis analyst Alex Koagne. "The two areas where there should be cost reduction are retail banking in France and abroad and the corporate and investment bank...I think there are possible cost cuts ahead at French retail."

BNP Chief Executive Jean-Laurent Bonnafe said in November that the lender was looking to cut costs in its branch network.

BNP is one of the world's biggest banks, with around 2 trillion euros in assets and a market capitalization of 56.5 billion.

In 2011, BNP's operating expenses were 26.1 billion euros, against revenues of 42.4 billion.

(Additional reporting by Dominique Vidalon; Editing by Christian Plumb and Erica Billingham)

Comments