Credit Agricole investment bank needs to cut costs, deputy CEO says

FILE PHOTO:  A Credit Agricole logo is seen outside a bank office in Vertou near Nantes
FILE PHOTO: A Credit Agricole logo is seen outside a bank office in Vertou near Nantes, France, February 11, 2019. REUTERS/Stephane Mahe/File Photo

April 10, 2019

FRANKFURT (Reuters) – Credit Agricole needs to reduce costs at its investment bank but will stop short of restructuring, a senior official said as the industry faces slowing revenue.

Xavier Musca, deputy chief executive officer of the French lender, told journalists that there were too many investment banks not sufficiently focused on their business.

But Credit Agricole already restructured in 2011 and 2012 to downsize the investment bank to refocus, he said.

“We will not announce a restructuring,” Musca said. “We will need to reduce costs, but it will not be a restructuring as announced by others.”

Societe Generale plans to cut 1,600 jobs, mainly at its corporate and investment banking arm, in an attempt to boost profits after a poor performance last year, France’s third-largest bank said on Tuesday.

And Mitsubishi UFJ Financial Group is considering scaling back its bond and equity sales and trading operations in London and New York as part of a broader restructuring of its global markets division, two sources said on Tuesday.

Musca said the bank would announce a medium-term strategic plan on June 6 but that radical change was not in store.

“We have a good business model, and we will not change it,” he told a club of business journalists in Frankfurt on Tuesday evening. The comments were embargoed for Wednesday.

Musca is also chairman of the board of directors at Amundi, the asset manager mostly owned by Credit Agricole.

Musca said that Amundi was open to acquisitions, though focused on organic growth.

“We consider Amundi as a natural consolidator in Europe, in particular in the euro zone,” he said. “We have capabilities to buy a lot of things, because we are a strong bank and have capacity to invest.”

Speculation has been mounting over recent weeks that DWS, the asset manager mostly owned by Deutsche Bank, could go on sale to finance a merger with Commerzbank.

Deutsche Bank and DWS declined to comment.

(Reporting by Hans Seidenstuecker; Writing by Tom Sims; Editing by Michelle Martin)

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