Reuters: Bankruptcy News: Rescued French bank's staff to protest job cuts threat

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Rescued French bank's staff to protest job cuts threat Sep 10th 2012, 16:18 Mon Sep 10, 2012 12:18pm EDT * State rescue likely to lead to thousands of job cuts * Protest march due Thursday to protect staff -unions * Former head of bailed-out bank received compensation By Lionel Laurent PARIS, Sept 10 (Reuters) - "Save our jobs!" reads a scrawled note in the window of a central-Paris branch of Credit Immobilier de France (CIF), a French mortgage lender whose 2,500 staff have been left fearing for their future after a state rescue. The notice is a sign that a backlash may be brewing over the terms of the bailout, as irate employees prepare a protest march on Thursday at a time of sinking approval ratings for centre-left President Francois Hollande and record unemployment in France. Hollande's promise to guarantee CIF's debts last week after it failed to find a buyer gave the lender a lifeline and effectively bailed out creditors that included foreign investors and French banks acting as counterparties. But it has left unanswered questions over the fate of employees - who have to wind down its 33 billion euro ($42 billion) mortgage book - and the availability of credit to low-income borrowers buying flats in social housing favoured by CIF. "If it wasn't for the state, we'd be bankrupt today," a CGT union representative said. "But avoiding the immediate shutdown of CIF has still put 2,500 jobs on the line." The French government has frozen new business at the bank and staff representatives say thousands of jobs will likely go to placate European regulators and protect French finances. ALARM BELLS By contrast, ex-CIF chief Claude Sadoun - seen as responsible for a business model that drove the lender into the wall - has been awarded a compensation package despite getting the push last week. The payoff amounts to 15 months' salary, CIF said, which at 2011 levels would be around 675,000 euros ($864,100). "The staff are planning a march on Thursday," said Regis dos Santos, head of the SNB trade union. The march, which will pass the offices of credit ratings agency Moody's in a nod to its role in setting alarm bells ringing over CIF earlier this year, is designed to draw attention to the plight of staff, dos Santos added. Employee representatives organising the protest said they blamed management for refusing to change a model that funded itself entirely on credit markets, rather than more reliable sources like customer deposits or a larger bank entity. French banks including state-owned Banque Postale were also to blame for turning their backs on CIF and refusing to buy it out earlier this year, the CGT union representative said. "It's mainly the management of CIF that are to blame in our eyes," the representative said. "Moody's sounded the alarm." Still, the government lifeline has avoided a messy bankruptcy that could have sparked a contagion effect in French finance. "We see this as an isolated event and we do not anticipate any contagion to the rest of the sector," Barclays economist Fritz Engelhard wrote in a note on Sept. 4. ($1 = 0.7812 euros) (Editing by David Holmes) Link this Share this Digg this Email Reprints

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