Damages related to Greek debt exposure continue to mount. ING and BNP have both taken writeoffs related to Greek debt and both are cutting jobs.
Expect more damage related to sovereign debt in Spain, Portugal, and Italy as well as general writeoffs related to the European recession. Please see Europe Undeniably in Recession; Germany Manufacturing PMI Contracts for First Time in Two Years, New Orders Collapse for a discussion of the recession.
In the US, Bank of America is shedding up to 30,000 jobs and BofA employees have flooded rivals with resumes. Here are a few key articles to consider.
ING to Cut 2,700 Jobs to Cope With Deteriorating Market
Please consider ING to cut 2,700 jobs, takes Greek hit
Dutch financial services group ING Group (ING.AS) (ING.N) said on Thursday it would cut 2,700 jobs at its Dutch banking operations to cope with a deteriorating market, which led to Greek and other impairments.
ING’s announcement follows job cuts by other big Dutch lenders. Nationalised Dutch bank ABN AMRO ABNNV.UL is shedding 2,350 jobs — some 9 percent of its workforce — as the state readies it for a return to private hands, while Rabobank said it planned 1,200 job cuts to save costs.
ING, which said it would go ahead with its plan to list its insurance operations by the end of 2013, took a 467 million euro writedown on Greek government bonds to put them at market value and said it has written down all its bonds to market value.
BNP Books $2.76 Billion Charge on Greek Debt
France’s biggest listed bank BNP Paribas (BNPP.PA) reported a 72 percent slide in third-quarter earnings on Thursday after it booked a bigger-than-expected 2 billion-euro ($2.76 billion) charge on Greek debt and sold billions of euros’ worth of government bonds.
The charge equated to 60 percent of BNP’s sovereign exposure to the crisis-wracked Greek economy and reflected last month’s pledge from private-sector creditors to write off a bigger chunk of their Greek debt, the bank said in a statement, though it added the plan was still “shrouded by uncertainty.”
Describing the bank’s Greek provisioning as “adequate” for the time being, BNP Chief Executive Baudouin Prot nonetheless did not rule out a Greek sovereign debt default, telling Reuters Insider TV it would be “unpleasant” but manageable.
“A (Greek) default certainly would be manageable. Unpleasant, but manageable,” he said. “I think that (BNP’s provisioning) is adequate…We will see as things go.”
“We will have some staff reductions as we implement the deleveraging plan,” he said. “We are working the numbers and we will make announcements to the different platforms in mid-November.”
Adequate for the Time Being
The key phrase in the above article is the statement by BNP CEO that “Greek provisioning is ‘adequate’ for the time being”.
The emphasis needs to be on “time being” because the heart of the batting order, Portugal, Spain, and Italy are next up to the plate.
“Time being” for Portugal and Italy may be a matter of days.
Bank of America Employees Flood Rivals with Resumes
Please note the increasing number of financial sector layoffs everywhere you look. ING, BNP, and ABN have all announced huge layoffs.
Bank of America Corp employees are flooding rival companies with resumes as a major cost-cutting program gets under way at the second-largest U.S. bank.
Competitors say they are getting an influx of calls, emails and LinkedIn connection requests as the bank embarks on a plan to slash 30,000 jobs over the next few years. The employees are scouting jobs in retail, commercial and investment banking, bankers and recruiters said.
In recent months, Bank of America has laid off employees, including senior leaders, in consumer, human resources, capital markets and other areas, people familiar with the situation said. The cuts are part of a round of 3,500 layoffs announced in August and the first wave of Project New BAC, which takes its name from the company’s stock symbol.
Bank of America said it had 288,739 employees on September 30, up from 288,084 three months earlier, but about 2,000 have been told they will be let go.
Efficiency at “New” Bank of America
Those last two paragraphs highlight the efficiency of “Project New BAC“. After announcing as many as 30,000 layoffs, supposedly 3,500 quickly, headcount is up by 655.
Also note that Bank of America has dropped its plan to charge customers $5 a month for debit cards following a customer backlash after the fee was announced in September. For details, see the Wall Street Journal article BofA Retreats on Debit Fee, Citing Uproar.
Yes indeed, “Project New BAC” is off to a rip-roaring start … of the same blatant incompetence we have learned to expect from the “Old” Bank of America.
Mike “Mish” Shedlock
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