* Banks eyeing staff cutbacks, branch closures -sources
* BNP spokeswoman says planning "one-off" adjustments
* SocGen, BNP to report 2013 results this week
By Lionel Laurent and Matthias Blamont
PARIS, Feb 10 France's two biggest listed banks,
BNP Paribas and Societe Generale, are
preparing to make cuts to their domestic retail operations to
help contend with the sluggish economy, union sources told
Retail banking in France has long been a cash cow for the
country's top lenders but over the past two years there has been
a slowdown in revenue growth as a stalled economy hit household
budgets, triggering a drive to cut costs.
Both BNP and SocGen are in the early stages of multi-year
cost-cutting plans as - like their rivals across Europe - they
try to steer a course between bolstering their balance sheets
and improving post-financial crisis profits.
As part of this, SocGen management has told staff unions it
is budgeting for around 190 job cuts at its French retail bank,
out of a total of 32,000 staff including the Boursorama and
Credit du Nord brands; and 42 job cuts in transaction services,
out of a total of 89 staff, two of the sources said.
The outlook for SocGen's French retail bank is lacklustre,
one source said, citing management as saying 2014 profit would
be "noticeably flat".
A SocGen spokeswoman declined to comment on "budgetary"
matters but said there was no new cost-saving project being
looked at besides those announced in the past.
BNP Paribas has told labour representatives it plans to
close around 100 branches out of a total of 2,200 in France,
another union source said. French newspaper Les Echos earlier
reported that BNP would this year close around 40 branches.
A BNP spokeswoman said: "We are planning one-off adjustments
to our network, such as closures or mergers. There is no overall
plan for branch closures and our adjustments are done in
accordance with our policy of no forced departures."
France's economic recovery is lagging many others in the
euro zone and its unemployment rate is at almost 11 percent.
President Francois Hollande, whose popularity is at a record
low, is counting on a planned 30 billion-euro corporate tax
break to ensure France does not fall too far behind.
BNP and SocGen have kickstarted company-wide drives to cut
costs to offset the fragile economic recovery and new regulatory
curbs on banks' risk-taking. BNP is targeting 2 billion euros
($2.7 billion) in savings by 2015, while SocGen is targeting 900
million in the same period.
"There will be 192 fewer jobs for (SocGen's) French retail
bank, though these will not be straight layoffs," said one of
the sources, without giving a specific timeframe, adding that it
would involve employees retiring or being reassigned elsewhere
in the company. "At GTPS (payments services) there will be 42
job cuts out of 89 total."
A second source confirmed the payments-services cuts, though
said the cuts in retail banking would be closer to 181.
"BNP is aiming to close around 5 percent of its branches
across the country," said another union source. "That is an
overall target of about 100 as part of the plan."
SocGen and BNP, France's two biggest listed banks by market
capitalisation, are due to report fourth-quarter results on
Wednesday and Thursday, respectively, with smaller rivals Credit
Agricole and Natixis due to report earnings
a week later.
BNP is expected to post broadly flat profit of around 1.0
billion euros, while SocGen is seen posting a 16 percent
increase in net profit, to 623.3 million euros, according to the
average of analyst forecasts in Thomson Reuters data.
Investors will be watching closely for any new long-term
forecasts from France's banks.
Some analysts are betting that BNP, seen as having the most
robust balance sheet of France's banks, will be an attractive
play for investors based on capital return once it sheds more
light on its long-term strategy and financial targets.
"We believe that there is clear upside for the French
banks," said Citigroup analyst Florent Nitu, who expects BNP and
SocGen to deliver around 12 to 13 percent returns on equity -
excluding intangible assets like goodwill - on the back of
expected capital return to shareholders.
($1 = 0.7327 euros)
(Editing by James Regan and Pravin Char)