SocGen’s Russian Unit Said to Cut Hundreds of Jobs in MoscowFabio Benedetti-Valentini and Jason Corcoran
Societe Generale SA’s Russian consumer-banking unit, OAO Rosbank, is cutting hundreds of back office jobs as it continues cost-reduction efforts, two people with knowledge of the matter said.
Rosbank is eliminating the positions at its Moscow headquarters, the people said, asking not to be identified because the matter is confidential. The Russian firm employs about 13,500 people. Officials at Societe Generale and Rosbank declined to comment on number of job cuts when reached by telephone.
Societe Generale, France’s second-largest bank by market value, aims to attain 900 million euros ($1.16 billion) of cost savings by 2015 globally, with half the effort coming from its consumer-banking businesses, the Paris-based lender said May 7, without giving more details on Russian cost cuts.
Societe Generale, based in Paris, merged Rosbank with its other Russian branch network BSGV in 2011, while mortgage lender DeltaCredit and consumer lender Rusfinance both became Rosbank’s fully owned subsidiaries at the start of that year.
Rosbank reduced its workforce by 2,700 positions between August 2011 and the end of 2012, according to its annual report. Societe Generale owns 82.4 percent of the unit, which operates 700 branches in 340 Russian cities and towns, according to its website.
Societe Generale’s 2015 plans in Russia, aimed at creating “a unique team and corporate culture for Russian subsidiaries,” include the “modernization” of information systems, according to a Rosbank presentation posted on its website in March. The Russian company is cutting administrative expenses and introducing “a new risk assessment system,” it said.
Rosbank went through an unexpected management shakeout last week as Chief Executive Officer Vladimir Golubkov was charged with commercial bribery and faces as much as seven years in prison if convicted. Golubkov denies any wrongdoing. Rosbank named First Deputy CEO Igor Antonov as interim head and is cooperating with the authorities, it said last week.
Antonov said the lender is “operating normally” and the firm is working closely with the police to “clarify the situation,” according to a statement on its website today.
“We are fully committed to ensuring a high level of transparency in our business processes and relations with our clients,” Antonov said. “And at the heart of all aspects of our business activity is an unrelenting commitment to strong business ethics.”
Societe Generale, alongside Italy’s UniCredit SpA and Vienna-based Raiffeisen Bank International AG, is among Western banks that are keeping a retail presence in Russia after rivals such as Barclays Plc and HSBC Holdings Plc abandoned theirs. The French lender earned 39 million euros from Russia in the first quarter, or 4.6 percent of its recurring profit. That’s up from 3 million euros a year earlier.
Societe Generale is holding its annual shareholders meeting today in Paris at 4 p.m. The French bank’s shares fell 0.1 percent to 31.96 euros by 2:45 p.m., giving the company a market value of about 25 billion euros.
Societe Generale last week reiterated that Russia is “one of its core markets” and that it sees “strong growth potential” in the country.