BRUSSELS (AFP) — Bailed out Franco-Belgian bank Dexia on Friday announced 900 job cuts after an estimated three billion euro (3.9 billion dollar) net loss last year as the eurozone entered recession.
In a statement, the bank said there would be "a reduction of about 900 full time positions for the entire Group in 2009," out of 36,500 employees overall.
The share dividend has been cancelled, bonuses for management scrapped and salaries for directors lowered in an economy drive to save 200 million euros, the company added.
Estimated losses in the fourth quarter of 2008 were put at 2.3 billion euros, making for an annual loss of three billion euros.
"The steps announced today are difficult but necessary if our Group is to adapt to the demanding conditions of a sustainable recovery," Dexia chairman Jean-Luc Dehaene said.
"The implementation of this transformation plan requires a contribution from shareholders, management and employees alike, with everyone assisting to place Dexia back on a firm footing."
The bank also announced "an in-depth reorganisation of trading activities" which it said were "dispersed," "decentralised" and "inefficient," exposing the group to operational risks.
The board agreed to cut risk limits on trading by half and to tighten up controls on two market platforms -- in Brussels for trading and central treasury operations, and in Dublin for portfolio management.
Late last year, France, Belgium and Luxembourg injected 6.4 billion euros into Dexia and pledged to guarantee its borrowings on the markets as its shares plunged during the worst credit crisis in generations.
Under the agreement, Belgium offers guarantees for 60.5 percent of Dexia's financing, France 36.5 percent and Luxembourg three percent.
"I am confident of our ability from 2009 to gather the first fruit of this unprecedented mobilisation," chief executive officer Pierre Mariani said.
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