Credit Agricole Plans Cost Reductions, Union Official SaysFabio Benedetti-Valentini
Credit Agricole SA’s corporate- and investment-banking division plans to lower costs to reach return on equity of at least 10 percent by 2015, without a new job-reduction plan, a union representative said.
Credit Agricole’s “strategic choice” for the unit remains to increase its corporate financing business while reducing the riskiest capital-market activities, said Didier Mas, a CFDT labor union representative at the firm. Credit Agricole’s corporate and investment bank isn’t planning a new job-cutting program after eliminating about 500 positions in France last year, he said.
Credit Agricole plans 150 million euros ($200 million) to 200 million euros in cost cuts at the division through 2015 in areas such as information-technology services, two people familiar with the matter said, citing a meeting the management had with labor representatives last month. The unit by the end of December had reached its target to cut headcount globally by about 1,750 positions, they said.
L’Agefi reported the cost-cutting plan earlier today, without saying where it got the information. An official at Credit Agricole’s corporate and investment bank declined to comment for this article.
Credit Agricole also sold the unit’s headquarters at La Defense, outside Paris, for 188 million euros, the people said.
Credit Agricole’s corporate and investment bank said in September that it expected a “medium-term” return on equity, or ROE, of between 10 percent and 12 percent. Credit Agricole in 2011 embarked on job-cutting and asset-reduction programs, closing operations in 21 countries. The bank stopped most of its equity derivatives business and has no proprietary trading desks left, it said Sept. 26.
Credit Agricole in November posted a 2.85 billion-euro third-quarter net loss on costs tied to the disposal of its Greek retail-banking unit.