Credit Agricole S.A., the largest retail bank in France, said it will slash 2,350 jobs worldwide.
The company just posted a 65 percent drop in profits for the third quarter, principally due to the bank’s significant exposure to Greece’s degraded sovereign debt -- taking a 637-million euro charge to write off losses.
The bulk of the job cuts (1750) will impact the investment banking unit, Cacib.
The bank employs 160,000 globally, two-thirds within France itself. Cacib has about 15,000 workers on staff, including 4.600 in France.
According to Reuters, the bank expects to report a net loss for the year, by writing off 2.5 billion euros ($3.2 billion).
The Wall Street Journal indicated that Agricole is also mulling not paying a dividend at its next general shareholders meeting.
Moody’s credit agency recently downgraded the ratings of France’s three largest banks, including Agricole, as well as BNP Paribas and Societe Generale, citing, among other things, higher borrowing costs and heavy Greek debt exposure.
As of Sept. 20, Agricole’s net exposure to Greek bonds totaled some 177-million euros, according to WSJ.
An unnamed London-based analyst commented to Reuters: "These are all things we would have expected to happen at some point, but putting it all in one quarter, in this kind of market, is unhelpful. The stock is at bombed-out levels already ... What will be key in how bad this gets is what they tell us about the ongoing business."
Meanwhile, Agricole’s chief executive officer Jean-Paul Chifflet insists the bank will not require a government bailout to meet increasingly stringent capital requirements.
Aside from contracting its investment banking activities, the bank is reportedly also seeking to sell its minority stakes in two banks in Spain and Portugal.