France's second-biggest lender, Societe Generale, has announced another cost-cutting program that will also entail the slashing of hundreds of jobs. The announcement came after net profit took a first-quarter dive.
Societe Generale on Tuesday announced a new savings drive after net earnings in the first quarter left much to be desired. Bottom-line profit generated in the first three months of the year dropped by half to 364 million euros ($476 million).
The bank said it was aiming to save 900 million euros by 2015. It added that 1,000 jobs would have to go in order to reach that objective.
General manager Jean-Francois Sammarcelli told BFM Business radio the cuts would include the loss of 550 jobs at the lender's headquarters in Paris. Societe Generale currently employs 154,000 people worldwide. Of those, 60,000 work in France.
Shareholders welcomed the cost-cutting initiative, sending the price of the stock up by 4 percent in early trading on Tuesday.
The bank said in a statement the savings scheme aimed to improve efficiency. "We need to reduce costs and strengthen competitiveness, simplify the way the group functions and strengthen synergy between the resources used by the different activities of the bank," it explained.
CEO Frederic Oudea pointed out the program would involve restructuring and investment costs of 600 million euros. He said it would enable the lender to achieve a 10-percent return on capital.
hg/mz (AFP, dpa)