Natixis job cuts fail to impress
Shares in the bank fell 5.3% today to €1.25 and credit rating agency Moody's cut its financial strength rating from C to D+ on a scale of A to E. The agency said that the move "reflects a deterioration of the bank's franchise, the scope for additional pressure on profitability and efficiency indicators, and the bank's high dependence on wholesale funding and especially its increasing reliance on its parents for meeting its financing needs".
On Friday December 19, Natixis announced it would shut down its credit and structured credit prop trading desks, and run off its €19 billion prop credit portfolio. The bank will also halt its exotic equity. fixed income and fund derivatives businesses, and cut back its offices outside Europe. South American offices will close and its expansion into India and Korea will halt, and many of its operations in Asia and the US will be shut down. This will translate into 840 jobs being cut from the commercial and investment banking business, and a saving of 10% of operating costs, by the end of 2009.
Natixis reported €1.1 billion in subprime-related writedowns earlier this year.
See also: Natixis losses top €1 billion
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