Crisis-hit European banks announced losses and job cuts on Monday, including a shake-up at Dutch financial group ING and a worse-than-expected final quarter from top French bank BNP Paribas.
France's biggest bank by market capitalisation expects to post a fourth-quarter net loss of around 1.4 billion euros ($1.8 billion) hit by writedowns and a rise in the cost of risk.
BNP said it now expects a 2008 full-year profit of about 3 billion euros, versus a figure of about 4 billion expected by analysts, according to Reuters Estimates.
"The fourth quarter was marked by exceptionally violent movements in the capital markets, especially in the equity markets," BNP said.
Rival Societe Generale issued a trading update last week saying it expected a fourth quarter profit.
Both BNP and SocGen plan to take part in a second tranche of support of 10.5 billion euros which the French government is due to launch.
Amsterdam-based ING said it faced a 2008 loss of 1 billion euros and would turn to Dutch state loan guarantees for its troubled loan portfolio as part of a sweeping shake-up.
It will cut 7,000 jobs from a total of about 130,000 to save costs this year and announced that Chief Executive Michel Tilmant would be replaced by board chairman Jan Hommen, former chief financial officer at Dutch electronics group Philips.
ING said the Dutch government would cover 80 percent of its 27.7 billion euros in residential mortgage-backed securities (RMBS) in subprime mortgages, made to risky borrowers, and "Alt-A" loans, made to borrowers with a slightly better credit profile. The government will take on the risk at a 10 percent discount to par value and receive 80 percent of any cash generated from the portfolio.
Royal Bank of Scotland also announced 750 job cuts at Irish unit Ulster Bank.
BARCLAYS JUMPS
British bank Barclays, its stock down by more than two-thirds in the last two weeks, took the unusual step of issuing an open letter from its chairman and chief executive to address the situation.
Its shares jumped by more than 40 percent on Monday after Marcus Agius and CEO John Varley in the letter denied that the bank needed to raise capital.
They said the bank had seen "a good start to 2009" and with 36 billion pounds ($49.62 billion) in committed equity capital and reserves it was not seeking new capital from either the British government or the private sector.
They reiterated a Jan 16 forecast calling for the lender to beat a market consensus of 5.3 billion pounds in 2008 full-year pretax profit and moved its results forward to Feb 9.
Barclays shares were up 41.6 percent at 72.5 pence at 1001 GMT.
Losses are forcing lenders to revamp operations across Europe, including in the asset management sector as fund managers grapple with clients withdrawing their money and writedowns on investments.
French banks Credit Agricole and Societe Generale on Monday announced a preliminary agreement to merge their asset management arms, which would create Europe's fourth largest.
The new company will be 70 percent owned by Agricole and 30 percent owned by SocGen.
