Le Monde | • Updated | By
the atmosphere is gloomy in the investment bank. Thursday, April 14, BNP Paribas has presented the unions a voluntary redundancy plan of 675 posts in its French activities of finance and investment banking (CIB). This branch employs 6000 employees in France.
The job cuts are to help the investment bank to achieve 1 billion euros in savings by 2019, a goal it set in February. The group does not exclude to announce further plans for post reductions in its CIB activities abroad, where the bank employs 23 000 employees.
“Again, banks shine with a social policy with no connection to their good financial results “, reacted Sébastien Busiris, Secretary General at FO banks. CIB BNP Paribas, which includes activities related to corporate and financial markets, generated in 2015 a profit before tax of € 3.3 billion, up 18% from 2014. Its sales of sales increased by 13% to 11.6 billion euros. But in the presentation of its annual results, the bank is concerned about the rising costs “ regulatory changes to come, the extent and timing are still uncertain .”
Profitability “eroded”
The group has launched in February a comprehensive plan to transform its financing and investment activities to “improve the operational effectiveness “, says one BNP. By industrialising its IT processes and operations, the CIB division is expected to achieve 365 million euros in savings, the bank hopes. With digital, it will also reduce costs by 180 million euros.
Along with job cuts, the BFI will recruit 221 people “focused on digital and technology” such as “data scientists” or specialists blockchain technology. Employees who apply internally will have priority. With this ad hoc program, CIB BNP Paribas plans to increase its turnover by more than 4% in three years.
Faced with increasing regulatory constraints and high market volatility , European investment banks are trying to cut costs to maintain profitability. Monday, April 4, Societe Generale announced the elimination of 125 jobs in France in its financing and investment bank, citing regulatory constraints and profitability “eroded” of market activities. During the presentation of its annual results in February, the red and black institution had warned it might not reach its goal of profitability in 2016, due to “increased capital requirements and [of] the economic and financial environment. “
” difficult start to the year “
and the bounce not for now. “ In the first quarter 2016, the results of bank financing and French investment should be quite low, due to a difficult start in the financial markets ,” said Gabriella Serres, analyst credit at Aurel-BGC. During the next two years, many investment banks in all regions of the world combined, will fail to be profitable, according to a report by Oliver Wyman and Morgan Stanley published on 13 March. It’s not for lack of trying. Since 2010, they have cut off a quarter of the assets on their balance sheets and reduced their costs by 8% to 10%, according to the study, but they remain “ too large in relation to the future customer demand “. Skimming is not finished.
Meanwhile, as the new rules require them to have more capital in front of their activities, investment banks are seeking other sources of profits . CIB BNP Paribas wishes to “ develop less capital consuming activities and advisory activities ” and “ emphasis on fee-generating products .” Natixis, the investment bank of Groupe BPCE, which has yet presented profits above expectations for 2015, considering the same trend.
However, even if the French investment banks follow the path of their European competitors by cutting in turn in the workforce, the announced cuts are less important. “We expected much more” , recognizes a union BNP Paribas preferring to remain anonymous. Credit Suisse, the second establishment helvète, has announced plans to eliminate 2,000 positions in its market activities for the single year 2016
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