![]() ![]() ![]() Unions say they will fight any merger that cuts retail branches. Politicians frequently stress the number of jobs at stake, with SocGen employing 130,000 staff and BNP Paribas 140,000. It can vegetate for another 6 months, or a year, maybe.”īut a French takeover would take a big toll on jobs, because of the need to close overlapping branches and prune units, such as SocGen’s flagship corporate and investment banking division. “It’s strategy of independence is illusory. “It is in the French interest to find the optimal domestic solution for this deal as soon as possible,” said Merrill in a report.īNP and Credit Agricole could even join forces with a friendly foreign bank, such as Italy's San Paolo Intesa ISP.MI in which Credit Agricole holds a 5 percent stake, to carve up SocGen, said Merrill Lynch.Ī source close to BNP, who asked not to be identified, said SocGen had little chance of survival. Merrill has a price target of 116 euros and a buy recommendation on the stock, which closed at 79 euros on Tuesday. SocGen shares fell to 66.80 euros after the scandal was revealed on January 24, their lowest level since August 2004. investment bank Merrill Lynch said on Tuesday there was a 70 percent chance that SocGen would be taken over, saying the bank’s woes could present BNP with a “once in a lifetime” opportunity to boost its position in France. Investors have said they expect a discount of about 30 percent.īrokers and analysts have unleashed a string of reports analysing the chances of either BNP or Credit Agricole mounting a bid or of the two teaming up to dismember SocGen and divide up the spoils between them. SocGen is pushing through the capital increase - which reports say could come as early as this week - to plug a hole in its balance sheet left by the trading loss. “That would have been a very bad sign, especially for the directors of the American banks JP Morgan and Morgan Stanley which are underwriting Societe Generale’s 5.5 billion euro capital increase,” the director told the weekly. ![]() “Firing Bouton would have given the impression that we were giving in to Sarko (Sarkozy) and that the bank was in a sense being nationalised,” an unidentified SocGen board member told closely watched satirical French weekly Le Canard Enchaine. The SocGen board once more rejected Bouton’s offer to resign on January 30. A huge international bank but a successful one,” said Stephen Hughes, a Zurich-based fund manager at Swiss private bank Clariden Leu.īut Sarkozy, said by analysts to dislike Bouton because of his links to former President Jacques Chirac, may have unintentionally thrown Bouton a lifeline. “There is a desire to have a French national champion. While stopping short of openly inviting a French rival such as BNP Paribas or Credit Agricole to bid for SocGen, the government has said the bank should stay in French hands and any foreign predators-in-waiting should keep clear. Meanwhile, regulators have taken SocGen’s risk-monitoring procedures to task. The bank has faced the wrath of French President Nicolas Sarkozy, who has said top SocGen managers should be called to account for their actions. Talk of a takeover by another French bank, BNP Paribas BNPP.PA or Credit Agricole CAGR.PA has been set ablaze by the dizzying fall from grace of SocGen, which has acquired a global reputation for innovation in financial derivatives. SocGen SOGN.PA has blamed losses on Jerome Kerviel, a 31-year-old trader who secretly placed huge bets on future movements of stock market prices while skirting around the bank's sophisticated systems. “I think one bank going for another bank will be tricky because the credit risks have been spread by the subprime crisis and that impacts everybody,” said Ian Harnett at Absolute Strategy.Ī French investment banker who spoke on condition of anonymity expressed a similar view: “There are far fewer candidates to go out and buy a bank because a lot of them are busy cleaning up their own shop.” subprime mortgages, has driven up capital costs, stretched balance sheets as many banks take charges on exposures and dramatically reduced the risk appetite of bankers.Īll of which could play into the hands of Daniel Bouton, SocGen’s independent-minded executive chairman, as criticism rains down on him over the bank’s handling of the affair, setting off speculation that SocGen is in play. The reason is simple: Rarely has there been a better time for a bank to guard its independence and ward off suitors.Ī global credit crisis, triggered by a meltdown in U.S. Le Figaro reported that the board of the bank would meet on Wednesday, a day after Bank of France Governor Christian Noyer expressed astonishment at the failure of the bank's systems to spot unauthorised deals that led to 4.9 billion euros (3.65 billion pounds) loss. The logo of French bank Societe Generale is seen at the entrance of its headquarters in La Defense, outside Paris, January 31, 2008.
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