BNP Paribas eyes 1 billion euro overhaul to cut costs
By Lionel Laurent
PARIS (Reuters) - French bank BNP Paribas (BNPP.PA: Quote) plans to spend 1 billion euros ($1.3 billion) over three years to pare down its businesses in response to lackluster growth in Europe, according to a union source.
Analysts and investors expect France's largest bank to lay out its new strategy in the coming months after a rocky year spent selling assets and cutting jobs.
Banks across Europe are shrinking to boost defenses against a weakening economy and comply with tougher global regulations.
BNP and domestic rivals Societe Generale (SOGN.PA: Quote) and Credit Agricole (CAGR.PA: Quote) have so far focused their restructuring efforts on investment-bank activities hardest hit by the financial crisis, but are now expected to turn to activities like retail banking exposed to weak European growth.
BNP's management outlined the overhaul to staff representatives on January 16 - promising to cut layers of management and simplify decision-making - but stopped short of any details on jobs or how much money would be saved, a source from the SNB union told Reuters.
"The plan, called 'Simple & Efficient', will run through 2015," the source said. "Over 1 billion euros will be spent on planned changes that will potentially affect all of BNP's business lines."
Shares of BNP were up 1.5 percent, to 46.33 euros, the fifth-best performer on the STOXX Europe 600 banks index . Continued...