Societe Generale to shut 400 branches and axe 2,000 jobs

PARIS • Societe Generale, France's second-largest bank, unveiled plans to shut 400 branches and cut some 2,000 jobs in the next five years as clients increasingly switch to online banking.

Chief executive Frederic Oudea said on Thursday that the bank hopes the bulk of the reduction will be achieved as staff retire or leave the bank voluntarily.

However, French Labour Minister Myriam El Khomri expressed concern and called on the bank to "avoid redundancies" as it culls its branch network by some 20 per cent.

In an interview with BFM television, Ms El Khomri said she could "understand the concerns" of workers who fear for their future. Unions also expressed fears of compulsory cuts.

As well as its subsidiary Credit Du Nord, Societe Generale owns online bank Boursorama, where it is looking to ratchet up its client base from 700,000 to two million in a five-year process for which it is earmarking €1.5 billion (S$2.3 billion) in investment. Societe Generale posted a 28 per cent rise in third-quarter net profits to €1.1 billion.

The group's move towards online banking is evidenced by a fall-off in the number of customers visiting physical branches - from 57 per cent in 2007 to 42 per cent in 2012.

Mr Oudea said the restructuring would highlight how the three wings - SocGen, Credit du Nord and Boursorama - complement one another.

While Ms El Khomri recognised the increasing popularity of online banking, the vice-chairman of the far-right National Front, Mr Florian Philippot, demanded that the government "put pressure" on SocGen to scrap its plans to cut jobs, indicating that closing branches would penalise small towns.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on November 07, 2015, with the headline 'Societe Generale to shut 400 branches and axe 2,000 jobs'. Print Edition | Subscribe