BNP Paribas cuts 1,600 Ukraine jobs

BNP Paribas, France’s largest bank, is cutting 1,600 jobs at its Ukrainian unit, or more than 20% of the workforce, as the country faces mounting unrest and a standoff with Russia.

“The bank, as far as possible, is functioning,” CEO Jean-Laurent Bonnafe said yesterday, referring to the Ukrainian unit, PAT Ukrsibbank. BNP’s pre-occupation for the past few weeks has been to ensure the security of employees in the country, he said.

Russia annexed the Black Sea peninsula of Crimea from Ukraine last week after Ukrainian protests led to the ousting of Pro-Russian president Viktor Yanukovych last month.

The new prime minister in Kiev has said the country faces economic collapse and called on the International Monetary Fund for aid. The US and EU responded to Russia’s takeover of Crimea by imposing sanctions on officials close to President Vladimir Putin.

Ukrsibbank had €1.6bn of loans at the end of 2013, down from €1.8bn a year earlier, BNP Paribas said in a presentation on its website. The unit will continue to adapt to the environment and outstanding loans will probably fall further, it said.

The French bank had 7,155 employees in Ukraine at the end of 2013, the most among its eastern Europe units and more than in the UK, according to its annual report. It closed 84 branches last year and currently has about 500.

Revenue in Ukraine amounted to €161m in 2013, the French bank said. BNP bought a 51% stake in Ukrsibbank in 2006 and owns about 85%. The European Bank for Reconstruction and& Development owns the rest.

Raiffeisen, Austria’s third- biggest lender, and UniCredit SpA, based in Milan, are the two European banks most exposed to Ukraine. UniCredit is in talks with a single bidder for its Ukrainian units.

Raiffeisen said on March 3 that it halted the sale of its Ukrainian subsidiary. Raiffeisen reported a profit in Ukraine last year, even with 33% of its loans classified as non- performing.