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Credit Lyonnais'

restructure

not to hit Asia

SINGAPORE: Beleaguered French state-owned bank Credit Lyonnais' massive restructuring in Europe will have little effect on its Asia operations, bank chairman Jean Peyrelevade said on Monday.

Peyrelevade said its Asian operations, which rank number two in terms of net profit contribution after North America, remain robust and the bank plans to expand its product lines in the region this year.

"1995 was a strong year for Asia and the beginning of 1996 is looking even stronger," Peyrelevade told a news conference.

Peyrelevade, who took charge of the bank in 1993, said it expects to shed between three to five percent of its workforce, primarily in Europe in an effort to cut costs and bolster profits.

He said, however, that the job losses were not likely to affect the U.S. and Asia operations which have staff strengths of 1,000 and 2,000 people respectively.

The bank's executive vice president for the Asia-Pacific, Jacques Kosciusko said Credit Lyonnais' earnings from Asia were "50 percent above budget" for the first quarter of this year, a sign earnings would be robust for the bank in the region.

Peyrelevade said North America and Asia were the bank's key profit centres in 1995, with North America chalking up net profit of US$150 million and Asia at US$100 million for 1995.

Credit Lyonnais -- brought to the brink of collapse by a reckless expansion spree -- last month reported a slim 13 million franc net attributable profit for 1995 after accumulating 21 billion francs of losses between 1992 and 1994.

Credit Lyonnais' activities in Asia include project finance, foreign exchange, private banking and aircraft financing in Singapore, equities and interest rate products as well as loan syndication in Hong Kong and corporate banking in most Asian centres.

The bank is also active in the equity market in India, heading the IPO (Initial Public Offer) business there, Kosciusko said.

He said the bank's most profitable activity in Asia was structured finance, which includes loan syndication and project financing.

"Structured financing in a more general sense has been very good to us, especially in the first quarter of this year," Kosciusko said, adding that the bank's activities in trade financing for niche markets and private banking in Asia were also profitable activities.

Peyrelevade said Credit Lyonnais' goal was to organise a sophisticated network of people in Asia providing a wide variety of products.

Credit Lyonnais was bailed out by the French government last year after huge losses. The 1995 profit came after the bank paid the state six million francs under a so-called "return to better fortune" clause in the rescue package which stipulates it must pay a portion of its earnings to the state until 2014.

The French government plans to privatise the bank by 2000.-Reuter