French bank Natixis to cut 840 jobs

PARIS: Natixis SA, France's fourth largest investment bank, said on Friday it plans to cut 15 per cent of its investment banking staff in what it called a 'radical' transformation aimed at stemming losses and reducing risk.

In a statement, Natixis said the planned 840 job cuts would come in "the more complex capital market activities" such as credit and structured credit proprietary trading, a euro19 billion ($28 billion) business that the bank said it is simply shutting down.

In all the bank is cutting operations that would have brought in about euro400 million in revenue next year, said Natixis spokeswoman Victoria Eideliman. Last year Natixis' investment banking revenue fell by nearly half to euro
1.83 billion, due largely to writedowns from the financial crisis.

Natixis said the moves would put it "in a position to adapt to the new economic environment resulting from the subprime crisis and the collapse of Lehman Brothers," and would help it achieve its 2009 goal of "reducing sources of losses as soon as possible."

The bank said it was reducing its 'headcount' in the corporate investment banking division from 5,700 to 4,860 by the end of next year. A bank spokeswoman declined to say how much the businesses that are slated for closure contribute to total revenue at Natixis.

The Paris-based bank will also shutter its more complex equity derivatives, fixed-income derivatives and fund derivatives businesses, and close down certain operations in Asia and the US Natixis will also close small offices in South America and abandon plans to expand into India and South Korea, the bank said.

Natixis is controlled by two of France's largest cooperative banks, Caisse d'Epargne and Banque Populaire. Natixis' investment banking arm lost euro 1.8 billion in the first nine months of 2008 due to the global financial crisis.

Its situation has worsened in the fourth quarter, with the bank warning this week that it may be an indirect victim of the collapse of Wall Street money manager Bernard Madoff's alleged $50 billion fraud.

In midday trading in Paris, Natixis shares rose 5.1 per cent to euro 1.33.