City braced for fresh job cuts

AT LEAST 500 City jobs are to go following the Societe Generale and Paribas merger, the latest in a series of deals that are dramatically altering the landscape of London's financial district.

Hundreds more head office jobs will also go now that AXA, the French insurer, has claimed victory in the auction for British insurance group Guardian Royal Exchange with a pounds 3.5bn deal.

Further job cuts are planned by Barclays, the high street bank, which is to axe hundreds of staff in a pounds 300m restructuring of its retail businesses.

"It is going to be a very bloody affair," warned one City banker last night, referring to the French bank merger. "There is so much overlap." The biggest overlap is in the equities and fixed-interest divisions.

Announcing their merger to create the world's fourth largest banking group, the heads of Societe Generale and Paribas sought to play down the prospect of large-scale redundancies.

However, they admitted there would be some "streamlining" overseas, in an effort to yield a targeted 800m euro of savings by 2001.

The banks believe that as a result of the merger they can cut the amount they have to set aside to finance their investment banking activities to a third of their group equity capital, while maintaining or even boosting the amount of business they are able to do.

Although there is little direct overlap in France, where Paribas, as a mainly business and wholesale bank, has no retail branch network to get in the way of SocGen's, there is considerable duplication in investment banking.

One source estimated that in London, where the two banks together employ around 4,500, the cost in terms of jobs could be as much as 500.

Tough bargaining will also take place in New York where SocGen recently added Cowen, the US investment boutique, to its stable in a $600m deal.

"There is a 30-40 per cent overlap," said John Leonard, an analyst at Salomon Smith Barney.

In London the overlap is particularly acute in equities, where both Paribas and Societe Generale have invested heavily over recent years.

Paribas, which has a strong position in the Eurobond market, has a clear edge in fixed income and asset management.

But in the merger advisory business, especially in the UK, Societe Generale has a stronger position.

Barclays is reorganising retail, its most profitable division, with a new structure based around two distinct areas catering for mass market and so-called high net worth individuals, replacing the traditional emphasis on products.

News Analysis, page 14

Start your day with The Independent, sign up for daily news emails
Life and Style
Marie had fake ID, in the name of Johanna Koch, after she evaded capture by the Nazis in wartime Berlin
historyOne woman's secret life as a Jew in wartime Berlin
News
news... and what your reaction to the creatures above says about you
News
Jihadi John
newsMonikers like 'Jihadi John' make the grim sound glamorous
News
newsAnother week, another dress controversy on the internet
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003