(Bloomberg) -- Societe Generale SA is studying ways to save 600 million euros ($662 million) in annual costs tied to its operations in Paris, part of an effort to win back investor confidence and improve returns.
The review, known internally as “Ithaque,” started in June, according to a person familiar with the matter. No decision has been made and the savings target may still change, said the person, asking not to be identified because the matter is confidential.
The bank declined to comment.
Chief Executive Officer Frederic Oudea is under pressure to go beyond existing cost cuts amid an economic slowdown and the prospect of even lower interest rates. The new reductions would focus on Paris support functions and add to an ongoing restructuring that aims to save 500 million euros and eliminate 1,600 jobs, mainly in the investment banking unit.
Banks across Europe have been cutting costs, with Deutsche Bank AG unveiling some 18,000 job reductions in July and UniCredit SpA weighing thousands of cuts. While SocGen and bigger crosstown rival BNP Paribas SA have been more reluctant to make bold moves, the prospect of slower growth will likely prompt more measures, UBS Group AG analyst Lorraine Quoirez wrote in a note earlier this week.
SocGen rose 1.6% at 11:08 a.m. in Paris trading, paring losses this year to 6.7%. The stock has trailed peers in 2019, which are roughly flat by one industry gauge.
Oudea, more than 10 years in the job, is slashing costs and selling assets after a surprise profit warning in January. He wants to preserve the bank’s leadership in businesses such as equity derivatives while strengthening capital.
SocGen has hired Bain & Co. to help identify ways to slash expenses by about a fifth on services such as information technology, human resources and the finance department, Bloomberg reported last month. The review might lead to hundreds of additional job cuts in Paris, one person familiar with the matter has said.
The firm is also working with McKinsey & Co. to find ways to bolster its key capital level and keep up with regulatory demands in a review known internally as “Optica,” Bloomberg reported in June.
In addition, Oudea has been exploring asset sales. SocGen is considering options for its Lyxor asset-management business, which oversees about 151 billion euros, people familiar with the matter said last month. The company is also weighing exits from its U.K. private banking business and Nordic equipment-leasing operations, people familiar with the matter have said. Last year, it agreed to sell its Belgian private banking unit to ABN Amro Group NV.
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