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.