European banks Dexia, the Franco-Belgian bank, is to cut 900 jobs and halve directors' pay this year after saying it would make a net loss of €3bn ($3.8bn) in 2008.
The lender to local councils, which was thrown a €6.4bn lifeline by the governments of France, Belgium and Luxembourg in September, said it would make a net loss of €2.3bn in the last quarter of the year.
This resulted from a net loss of €1.7bn on the sale of FSA, the insurance subsidiary behind most of its problems, and a net loss of €1.2bn from writedowns due to stock market volatility.
Assured Guaranty, the bond insurer in which Wilbur Ross, the US financier, is a large shareholder, agreed to buy FSA for an enterprise value of $1.45bn in November.
Pierre Mariani, who replaced Axel Miller as chief executive in October, said the 900 jobs represented about 6 per cent of the workforce and would contribute to savings of €200m this year, representing 5 per cent of the cost base. The move is part of the 15 per cent of cost cuts announced in November.
There will be no dividend or management bonuses paid for 2008.
Scheherazade Daneshkhu, Paris
