BNP Paribas says to cut 1,600 jobs in Ukraine

Mon Mar 24, 2014 12:43pm EDT
 
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By Lionel Laurent and Matthias Blamont

PARIS (Reuters) - BNP Paribas (BNPP.PA: Quote), France's biggest listed bank, said it would reduce Ukraine staff by 1,600 by 2015 as part of a restructuring of its local unit in the face of a tough economic environment.

International banks exposed to Eastern Europe have been in the spotlight since Moscow formally annexed Ukraine's Crimea last week, triggering U.S. and European Union visa bans and asset freezes against a group of Russians and Ukrainians.

French lenders have the overall biggest exposure to Russia, according to Bank for International Settlements data. BNP owns a minority stake in a consumer-finance joint venture with Russia's Sberbank (SBER.MM: Quote) and also owns Ukrainian lender UkrSibBank, while Societe Generale (SOGN.PA: Quote) - BNP's smaller domestic arch-rival - owns Russian bank Rosbank.

"Over the past few years we have had to adapt to the Ukrainian economic environment," BNP Chief Executive Jean-Laurent Bonnafe told journalists ahead of an investor presentation of its 2014-2016 strategy in Paris, which made a brief reference to the planned staff reductions.

Despite having already reduced UkrSibBank's loans outstanding and closed 84 of its branches in 2013, Bonnafe said the overall mood was "business as usual" and the focus was on preserving employee security.

On Russia, the CEO said BNP would comply with sanctions and distance itself from "a number of" counterparties, without giving specific details. The sanctions would likely hurt the Russian economy, he added.

BNP is still forging ahead with a plan to increase its exposure to Central and Eastern Europe, however, thanks to the pending acquisition of Polish bank BGZ. BNP has already begun cutting costs in Poland, however, since identifying 95 cost-saving initiatives in 2012.

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BNP Paribas bank Chief Executive Officer Jean-Laurent Bonnafe adjusts his glasses as he attends the bank's 2014-2016 business development plan presentation in Paris, March 24, 2014. REUTERS/Charles Platiau