French bank plans to cut 900 more jobs and close 15% of branches
SocGen to incur up to $678 million in fourth quarter charges
Societe Generale expects to book exceptional charges of about €570 million (US$678m) in the fourth quarter, related to tax changes and a plan to cut additional jobs in France.
As many as 900 job cuts may take place at its domestic retail banking business, resulting in a charge of about 400 million euros, Societe Generale said in a statement late on Monday. That’s on the top of the 2,550 positions the bank has already said it will eliminate. SocGen will take another exceptional expense related to three tax changes.
The bank announced the surprise charges as SocGen chief executive Frederic Oudea presents his third set of financial targets since the global credit crisis to investors in Paris on Tuesday. He’s betting that a push in tech investments and mobile banking will bolster revenue and profitability. The new targets envisage progressive growth of the dividend and improved profitability with “strictly managed” market risks, according to a separate statement.
“In a European banking sector undergoing radical industrial change, the group is ready to enter into a new phase of its development and transformation,” Oudea, 54, said.
The bank’s new targets include the goal to generate €3.6 billion of additional revenue within three years as it prioritises key clients. It also plans to close or sell some businesses and reduce by about 15 per cent its banking branch network in France.
Oudea, who reorganised senior management along leaner lines of command during recent months, is seeking to guide SocGen to a return to annual revenue growth both in French retail and trading after declines in 2016 and so far this year. The bank, a global leader in equity derivatives, is targeting about 2.5 per cent annual sales growth through 2020 at its global-markets business.
That’s after a third quarter in which it was caught in a trading slump that also hit larger European rivals Deutsche Bank AG and Barclays Plc. The bank also said it expects about 3 per cent annual growth at its financing and advisory unit.
Oudea will also look at potential asset sales or closures of “sub-scale” businesses to refocus the bank. Such divestments, whose effects are not taken into account in the 2020 financial targets, may represent 5 per cent of SocGen’s risk-weighted assets, freeing capital for more profitable activities or creating opportunities to return money to shareholders, the bank said.