PARIS — A shock bid by Banque Nationale
de Paris for rivals Societe Generale and Paribas has unleashed a
battle over the French financial sector. The following describes
the key banks involved.
Banque Nationale de Paris
Predominantly a retail bank, BNP has long been looking for a
partner in the French retail market but ended up isolated by
merger plans between rivals Societe Generale and Paribas.
It is one of the big three French commercial banks along
with Credit Lyonnais and Societe Generale.
It has worked hard to become a universal bank with a wide
international network, and has formed numerous joint
subsidiaries with Germany's Dresdner Bank outside their home
markets.
BNP was founded in 1966 through the merger of two
nationalized banks dating back to 1848. It was privatized in
1993.
Societe Generale
Sought by BNP as a partner in the French market, Societe
Generale is seen as having been fairly successful in breaking
out from a domestic retail branch base to become a more global
player, but was struggling to do this alone.
Its investment banking arm has won a reputation abroad for
sophisticated financial engineering.
Founded in 1864, it was nationalized in 1982 by the
Socialists and privatized again in 1987 after the right returned
to power. It announced last month plans to merge with investment
bank Paribas.
Paribas
Investment bank founded in 1872 through a merger of Banque
de Paris and Dutch bank Banque de Credit et de Depots des
Pays-Bas. Nationalized by the Socialists in 1982, it was
privatized again in 1987 and played a dominant role as a major
holding company.
As the heyday of holding companies waned, it slimmed down in
the 1990s and refocused on three core businesses, investment
banking, asset management and retail financial services.
Unlike potential partners BNP and Societe Generale, it does
not have retail branch network.
Credit Agricole-Indosuez
A non-quoted mutual bank, Credit Agricole is now France's
biggest bank — although a merged SG-Paribas would be bigger.
With its outlets in virtually every town and village in
France, it has a stranglehold on the retail market due to its
deep roots in the rural community.
Commercial banks complain the predominance of Credit
Agricole, which does not have to worry about making profits,
distorts competition. It made serious inroads into the
international investment banking market with the purchase of
Indosuez in 1997.
It has expressed interest in an alliance with Credit
Lyonnais and is seen by analysts as a plausible option to keep
the soon-to-be-privatized bank in French hands.
Credit Lyonnais
A tale of riches to rags, Credit Lyonnais was founded in
1863 and in the 1980s was the first French bank to set off down
the road of expansion to become a leader on the world stage.
That expansion binge went badly wrong and the government has
been forced to step in repeatedly with massive state bail-outs.
The government was due to publish a decree this week
announcing the sale of Credit Lyonnais, which must be privatized
in return for European Commission approval of the state rescues.
Analysts saw it as a potential consolation prize for BNP,
seeking a partner after being left in the cold by the Societe
Generale-Paribas merger.
Those hopes were dashed when the government said it was
sticking to its plans of setting up a group of core shareholders
for Credit Lyonnais.
Credit Commercial de France
A middle-ranking bank targeting well-off clients, CCF has
the most profitable retail bank network in France.
But because of its size it is seen as the most likely of the
French banks to slip into foreign hands. Belgium's KBC
Bancassurance Holdings is the largest single holder of CCF
capital with a 12.5 percent stake, though Swiss Life has more
voting rights and slightly less capital. Dutch bank ING also
holds a small stake.
Axa
Insurer company Axa is represented on the boards of BNP,
Paribas and Societe Generale, and has significant stakes in the
first two. Its chairman, Claude Bebear, is seen as a prime mover
behind the scenes.
An AXA spokesman said the BNP bid for SocGen and Paribas
made sense and was in the best interests of BNP shareholders.
Bebear, who transformed Axa from a regional French insurer
into a global player, is a past master at snapping up struggling
companies and incorporating them into the Axa empire.
