French bank merger raises redundancy questions

The prospect of a merger between Natexis and Ixis is setting hearts racing in France over potential redundancies.

Caisses d'Epargne's Ixis and Banque Populaire's Natexis said last week that they were contemplating merging under a new brand - Natixis - to create a new force in French banking and take on SocGen, Calyon and BNP Paribas.

Under the proposed plan, retail banking divisions would be kept separate, while investment banking and asset management would be fused.

French recruiters say it's premature to call how many jobs may be shed as a result. "It's too early to say whether there will be redundancies, or even if there is going to be a merger," says Guy de Brabois, a consultant at Robert Walters in Paris. "If it goes ahead, there will probably be some redundancies, but both are heavily unionised and it will be a sensitive topic."

One senior banker close to the deal says there would be overlaps in the French brokerage businesses of the two companies, and potentially in the asset management arms as well.

"At the moment, you have 56 analysts at Ixis in Paris and another 30 at Natexis," he says. "Will we end up with 90 analysts covering the French market? I don't think so."

However, the banker says redundancies could be minimised by the global aspirations of the combined banks. "When you compare investment banking headcount at global French banks like SocGen, Calyon and BNP Paribas, there would be room for growth to say the least. SocGen, for example employs 2,300 people in New York, Ixis and Natexis combined employ fewer than 700."

More certain is the fact that a merger would reunite former colleagues. Natexis is in the grip of a hiring spree which has seen it recruit several staff from Ixis. Last year, for example, Natexis poached Denis Krief, now head of fixed income trading, from its erstwhile rival.