February 21, 2017 / 1:07 PM / 3 years ago

French bank BPCE targets 1 billion euros of annual cost savings by 2020

PARIS (Reuters) - France’s second-biggest retail bank BPCE announced plans on Tuesday to trim and reorganise its branch network and invest in online banking, as it targets annual cost savings of 1 billion euros (£0.88 billion) by 2020.

The BPCE bank logo is seen outside their headquarters in Paris, September 24, 2015. REUTERS/Philippe Wojazer -

French banks have cut staff and reduced the number of branches, while investing in online services to counter low-cost competitors, as low interest rates have hurt profits.

BPCE said it would shut 5 percent of its branches, and replace slightly less than two-thirds of an expected 11,000 employee departures through natural attrition over 2017-2020.

The plan to merge and simplify the organizational structure of its regional banks would result in 750 million euros of “cost savings in a full year by the end of 2020”.

This comes on top of 250 million euros in cost savings, announced by its investment bank Natixis last year.

At the group level, BPCE said it would invest 790 million euros in the transformation plan in order “to generate savings worth 1 billion euros in a full year in 2020”.

It said it would launch online selling of home loans, quicken the opening of current account and introduce fingerprint recognition technology to simplify access to online banking services.

By 2020 it expects 90 percent of its customers to be using online banking, up from 75 percent currently.

BPCE acquired one of Germany’s best-known online banks Fidor in July last year. It plans to launch the services in France this year and to cover “principal European markets” by 2020.

BPCE was formed by a state-backed merger of French regional banks Banque Populaire and Caisse d’Epargne in 2009, a move aimed at preventing their investment banking business Natixis from collapsing during the financial crisis.

Reporting by Julien Ponthus and Maya Nikolaeva; Editing by Susan Fenton

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