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Portraits of Key Banks in French Takeover Fight
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.


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.


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.

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