* Lloyds cuts tech investment plans
* Santander forecasts 5% profit hit if recovery is sharp
* RBS says rate cuts to hit income
* European banks down 40% this year
(Adds French bank comments)
By Lawrence White, Iain Withers and Maya Nikolaeva
LONDON/PARIS, March 17 (Reuters) - Some of Europe's biggest
banks have warned the coronavirus will hit their already
under-pressure earnings, as a lockdown in Britain and across
parts of continental Europe will slow economic activity, eat
into fee income and put corporate borrowers at risk.
Societe Generale Chief Executive Frederic Oudea
said on Tuesday it was too early to say what would be the impact
of the virus on the bank's earnings, but that mortgage lending
will suffer.
"The production on certain loans will not be very dynamic.
Let's be realistic, I don't think that French citizens will
particularly go to branches to borrow on the mortgage", Oudea
said in a presentation at the Morgan Stanley European Financials
conference in London.
Britain's Lloyds Banking Group will delay part of a
3 billion pound ($3.62 billion) technology investment programme
in response to the epidemic, Chief Executive Antonio
Horta-Osorio told the same conference.
"Now we have a huge external shock, which will provide a
delay," he told the audience of investors and analysts at the
conference.
Lloyds has already spent 2 billion pounds of the plan but
could delay deploying the remaining third.
Prime Minister Boris Johnson on Monday shut down social life
in Britain and ordered the most vulnerable to isolate for 12
weeks. The moves, which follow similar actions in Italy and
France, are likely to hit banks from multiple angles.
A decline in consumer spending will lower the bank's fee
income, Horta-Osorio said, and Lloyds will likely sell fewer
mortgages as homebuyers are prevented from viewing potential
properties by the social isolation measures.
Spain's Santander, the euro zone's second biggest
bank by market value, offered a more upbeat outlook at the same
conference.
The bank's chairman Ana Botin said a "v-shaped" scenario of
sharp economic decline followed by quick recovery would cut the
bank's profits by only 5% this year, excluding any mitigating
actions.
With the European banking stock index trading down
40% year-to-date, banks urged investors not to draw comparisons
with the 2008 crisis when lenders were the epicentre, saying
they have boosted capital and can help the economy recover.
France's biggest bank BNP Paribas told investors
that its capital has more than doubled since 2008 and that it
had 309 billion euros ($339.28 billion)in immediately available
liquidity reserves.
Royal Bank of Scotland Chief Executive Alison Rose
said the Bank of England's recent 50 basis point rate cut would
likely cost it some 340 million pounds in revenues.
($1 = 0.8286 pounds)
($1 = 0.9107 euros)
(Reporting By Lawrence White and Iain Withers in London and
Maya Nikolaeva in Paris; additional reporting by Inti Landauro
in Madrid, editing by Simon Jessop, Jane Merriman and Alexandra
Hudson)
