PARIS (Reuters) - Irate staff at Credit Immobilier de France (CIF) took to the streets of Paris on Thursday to call for a full nationalisation of the troubled French mortgage lender that would save 2,500 jobs and keep credit flowing at a time of economic weakness.
The protest adds to the pressure on President Francois Hollande as he juggles sinking approval ratings, record unemployment and a grinding economic slowdown.
Protesters blew whistles, banged drums and chanted slogans accusing Hollande of having “sacrificed” CIF as they set off from Saint Lazare train station in the city centre. An estimated 2,000 people turned out, according to unions and transport police.
Although the state effectively bailed out CIF’s creditors and other French banks exposed to it on September 1 by guaranteeing the lender’s debts, CIF still faces being wound down to placate European regulators and to protect French finances.
“The rescue was a public relations stunt ... Hollande is doing the exact opposite of socialism,” said Karine Giovacchini, a 40-year-old single mother from the southern city of Marseille.
“We want the state to take over all of the bank, including its staff.”
CIF, which has 33 billion euros (26.4 billion pounds) in assets and a mortgage market share of 3.5 percent, had for months been seen as a liability to France’s banking system after credit-rating agency Moody’s warned its dependence on funding markets exposed it to a major financing crunch.
The otherwise profitable bank does not collect customer deposits and one union representative said it was prevented by law from accessing central bank funding. Its complex, cooperative-backed structure, coupled with its focus on financing social housing, put off prospective buyers and forced the state’s hand.
“Our management has been told to stop loan production. Us employees have been left in the dark,” said Abdel Mimoun, 40, who works for CIF in Paris. “The only hope left is for a takeover.”
Union leaders said state bank Caisse des Depots would be the ideal candidate to take over and fund CIF, which would preserve the flow of housing credit to low-income borrowers and offer a future to more than 2,000 employees involved in lending.
The combined group could then form a housing bank, backed by hundreds of billions of euros in popular tax-free, regulated savings that regularly flow into Caisse des Depots’ coffers.
“There is an alternative solution (to winding down the bank) that would allow CIF to keep operating,” SNB union head Regis dos Santos said. “CIF must be made the core component of a new state-owned housing bank.”
Separately, Claude Sadoun, the former boss of CIF, whom many blame for driving the bank to the wall, also called for the French state to turn the bank into a “public player” dedicated to housing.
“There must be a future for CIF,” he told daily Le Figaro. “It is not too late to study tying CIF to a state-owned institution.”
Sadoun received a compensation package after the state rescue forced him out. The payoff amounts to 15 months’ salary, CIF said, which at 2011 levels would be around 675,000 euros.
Some protestors said that regardless of management mistakes, it was now up to the government to offer solutions and deliver on campaign promises earlier this year to fight back against financial markets.
“Sadoun clearly deserves a share of the blame, but it’s up to the state to put forward an answer now,” said Marc Pissot, a 34-year-old financial advisor from the centre-west city of Tours. “Just where is the change promised by Hollande?”
Additional reporting by Dominique Vidalon; Editing by Mike Nesbit and Mark Potter