Credit Agricole Seen Returning To Low-Risk Roots

By Lionel Laurent

PARIS, Dec 10 (Reuters) - When French bank Credit Agricole (CAGR.PA) last unveiled a strategic plan in 2005, it promised international growth far beyond its humble agricultural origins and a big push in the glitzy investment banking business.

Five years on, with these ambitious dreams shattered by the financial crisis and its share price cut in half, the bank's new management is seen winding back the clock to less risky times as it prepares a 10-year outlook due to be unveiled on Dec. 15.

New Chief Executive Jean-Paul Chifflet has already rung in some key changes, replacing the head of Credit Agricole's crisis-scarred investment bank with a green-fingered executive trained in agricultural engineering -- a sign that sleepy, domestic banking is very much back in fashion.

"This is about a group of farmers going back to what they do best," a London-based bank analyst said, citing strong retail and asset management activities that helped Credit Agricole double profits ib the first nine months of 2010.

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French Bank Offers "Disco"-Style Branch Makeover

By Lionel Laurent

PARIS, Dec 3 (Reuters Life!) - French bank BNP Paribas has poured 5 million euros ($6.60 million) into a makeover of its flagship branch opposite Paris' Garnier Opera House, even as market jitters linger over the health of euro zone banks.

Purple shag-pile carpets, a glitzy silver hexagon-patterned ceiling and a wall covered with green shrubs are just some of the decorations adorning the re-opened branch, which has iPads on display and a kids' corner with walls to scrawl upon.

"It's too luxurious...Our taxes may not have paid for it but our fees did," said Nouraï, a 40-year-old hotel manager who has used the branch for 15 years. She described the array of Austin Powers-style colours as "a bit disco" and said the 60s-style makeover would not be fashionable in a few years' time.

The average cost of a standard bank branch in Paris is 300,000 euros, according to Stephane Court, of Equinox Consulting. "BNP's store, at 2,600 euros per square metre, is pretty expensive, but then again this is a completely new kind of branch," he said.

BNP, which has repaid state aid received during the financial crisis, has seen its share price lose 13 percent since a resurgence in fears over euro zone debt began in mid-September. The stock has lost nearly half its value since pre-crisis highs.

Ex-Trader Kerviel Sentenced To 3 Years In Jail

By Lionel Laurent

PARIS | Tue Oct 5, 2010 4:26pm EDT

(Reuters) - Former Societe Generale trader Jerome Kerviel was sentenced to three years in jail by a Paris court on Tuesday for his role in a trading scandal and ordered to pay the French bank 4.9 billion euros ($6.8 billion).

The verdict came as a victory for SocGen, which always maintained Kerviel acted alone and without the sanction of his managers at the bank. It had sought payment of damages for the money it lost unwinding the trader's risky market bets in 2008.

Kerviel's lawyer said he would immediately appeal the verdict, which he said was "senseless" and cleared the bank of all blame.

"Jerome is outraged ... that the people who created him have been totally exonerated," Olivier Metzner told journalists outside the courtroom in the Palais de Justice. Kerviel was given a total prison sentence of five years, two years of which were suspended. The public prosecutor had recommended Kerviel serve at least four years behind bars, with a fifth year suspended.

The payment to SocGen equates to 3.2 percent of France's central government deficit for 2010, the GDP of Monaco or 16 percent of the French bank's market value. Kerviel is currently paid 2,300 euros a month as a technology consultant.

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Gym Culture Not Working Out For The French

The pick-up of which I am most proud? When Gawker sister site Jezebel took this one up.

By Lionel Laurent

(Reuters Life!) - The French may love to look good but few are willing to work up a sweat over it.

Despite increasing awareness of the benefits of healthy eating and physical exercise, going to the gym in France is still a niche activity that has yet to capture the mainstream.

France's generous healthcare system, its cultural preference for outdoor sports and its lack of affordable good-quality clubs are seen as reasons behind the country's low rate of gym goers, even relative to laid-back neighbors Spain or Italy.

"It appears to me that more people are sitting in cafes smoking cigarettes and drinking coffee than working out ... the French don't see fitness as a lifestyle," says American-born fitness consultant Fred Hoffman, who has lived in Paris for 21 years.

Only 5.4 percent of French people belonged to a health club in 2008, according to the International Health, Racquet and Sportsclub Association, compared with 9.5 percent for Italy, 11.9 percent for the United Kingdom and 16.6 percent for Spain.

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Deutsche Bank Piles Basel Pressure On Rivals

By Lionel Laurent and Edward Taylor

Sat Sep 18, 2010 4:13pm IST

PARIS/FRANKFURT - Deutsche Bank's race to comply with Basel capital requirements ahead of schedule is piling pressure on some straggling rivals to do the same and convince investors of their financial muscle.

Germany's biggest bank preempted the unveiling of the long-awaited new Basel III regime by announcing a 9.8 billion euro ($12.83 billion) cash call on the same day.

It pledged to meet Basel rules by 2013, five years sooner than necessary, despite the purchase of retail lender Deutsche Postbank that will absorb most of the fresh capital.

This will make it harder for other European banks facing potential capital shortfalls like France's Credit Agricole or Germany's Commerzbank to bide their time.

"Reaching Basel targets before the official schedule will, I think, become a point of excellence...There will be some pressure on other banks that are not able to meet this sort of target," said Konrad Becker, analyst with Merck Finck.

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SocGen's Oudea Sees Distant M&A Upturn

By Lionel Laurent and Matthieu Protard

PARIS | Wed Aug 4, 2010 2:02pm EDT

(Reuters) - Europe's banks will focus on fighting sluggish economic growth and tighter regulation rather than carrying out mergers and acquisitions in the near term, the head of French bank Societe Generale (SOGN.PA) told Reuters.

The environment for deal making could improve beyond the next 18 months, but for now opportunities are thin on the ground, Frederic Oudea said in an interview in his office overlooking Paris' La Defense business district on Wednesday.

"Operating challenges are facing all banks...They're the priority for everyone," said Oudea, who has overhauled management at SocGen to help restore confidence after the financial crisis. "Tighter regulation will make things tougher."

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An interview with France's original deficit fighter, Thierry Breton

Breton today runs IT Services company Atos Origin but is still at home when it comes to lean times and cost efficiency.

INTERVIEW-UPDATE 1-Atos sees rev upswing, in RBS unit talks

615 words

29 June 2010

19:11

Reuters News

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(c) 2010 Reuters Limited 

* Atos Origin sticks to 2010 financial targets -CEO

* Confirms in talks with RBS WorldPay bidders

* Year-to-date order book superior to 2009 period

* H1 sales decline in line, growth seen in later quarters

(Adds quotes, detail)

By Lionel Laurent and Cyril Altmeyer

PARIS, June 29 (Reuters) - French software services group Atos Origin expects an upswing in revenue later in the year as it enjoys a pick-up in orders despite the uncertain economic environment, its chief executive said.

Atos, which supplies IT services to the Olympic Games and specialises in secure online payments, is benefiting from improved business spending on technology in the wake of the economic crisis and believes it can help the more cost-conscious public sector, Thierry Breton told Reuters in an interview on Tuesday.

"Governments are far from having exhausted all the cost-saving possibilities IT services can give them," he said.

The group confirmed it is in talks with bidders for Royal Bank of Scotland (RBS) payment-processing unit WorldPay, but only as a business partner and not a financial investor, Breton said.

"Concerning this asset, we indicated we were positioning ourselves more as an industrial partner ... We are in talks with candidates bidding for WorldPay," Breton said, without giving more details.

There are three groups in the final round of the auction for WorldPay -- TPG, Clayton, Dubilier & Rice and joint bidders Advent International and Bain Capital -- according to sources familiar with the situation. 

Britain's RBS has put the unit up for sale as part of a series of divestments to appease regulators after it received billions of pounds in state aid.

DEBT THREAT

Despite the uncertain economic environment as governments grapple with their debt load, Atos' Breton reconfirmed the group's 2010 targets and struck a confident note for the future.

The group is forecasting a slight rise in operating margin this year, stable cash flow year-on-year and a debt level close to zero.

"I am not at all changing the criteria we are tracking ourselves against," said Breton.

Breton, 55, a former French finance minister who was known for his dedication to keeping deficit levels in check, said Atos had prepared itself for lean times and more cost-conscious customers.

"Our clients are going to have to manage with increasing parsimony their capital expenditure and that's why we are investing more in high-tech transaction services (like cloud computing)," Breton said.

He said new business opportunities such as cloud computing as well as new energy subsidiary WorldGrid would help the group grow over the next few years.

WorldGrid, which specialises in "smart energy" applications, is expected to make 150 million euros ($183.1 million) in sales this year and should be launched at the end of July, said Breton.

The pressure to spend less in the public sector will also bring opportunities for Atos, though Breton admitted there would be pressure on prices from government cuts in Britain.

Atos Origin has a market capitalisation of 2.4 billion euros and competes with U.S. group Accenture and France's Capgemini

It has said order intake in the first quarter rose 17 percent like-for-like to 1.6 billion euros ($2.2 billion).

Breton said on Tuesday the group's order book-- excluding the impact of bankrupt German client Arcandor-- was higher year-to-date than in the corresponding period in 2009.

Breton took the helm in 2008, replacing Philippe Germond who left after running afoul of activist investors Pardus and Centaurus. (Editing by Karen Foster) ($1=.8194 Euro)

Lazard Banker Covets Le Monde, Political Heights

By Leila Abboud and Lionel Laurent

PARIS, June 15 (Reuters) - Lazard's top banker in France, Matthieu Pigasse, could soon take a joint controlling stake in elite newspaper Le Monde in a bid to expand his influence outside business and into the heart of French political life.

If successful, France's flagship daily would join a burgeoning media portfolio that includes Les Inrockuptibles, a cultural magazine that the punk rock-loving banker bought last year and is transforming into a general interest news weekly.

People who know Pigasse describe him as deeply charismatic, a hard worker who fires off 2 a.m. emails and listens to loud music at his office, and who has been ruthlessly cynical on his rise to power.

They say his move on Le Monde reflects the 42-year-old unmarried father of three's desire for respect and perhaps even a cabinet post were the Socialists to take power.

"He is someone hungry for the recognition of the establishment," said a former classmate. "He has had enormous success in business and is very wealthy but it is not enough. He now wants to become a press baron."

(Read on....)

Rogue Trader Kerviel Branded "Liar" In Court

By Lionel Laurent and Thierry Leveque

PARIS | Wed Jun 9, 2010 3:23pm EDT

(Reuters) - Rogue trader Jerome Kerviel was branded a liar who took "inhuman" risks by a former boss on Wednesday during a trial over trading losses that brought French bank Societe Generale close to collapse.

The bank's former head of investment banking, Jean-Pierre Mustier, hit back at Kerviel's claims in court that SocGen tolerated unauthorized trading positions that eventually cost the bank 4.9 billion euros ($6.57 billion) to unwind in 2008.

"You lied to me all along," an animated Mustier told Kerviel in the cramped courtroom in the Palais de Justice, before telling judges Kerviel took "inhuman" risks that would be termed "criminal" in the United States.

Kerviel, 33, risks five years in jail and a 375,000-euro fine if found guilty of charges of breach of trust, computer abuse and forgery. His trial began on Tuesday amid a media frenzy over one of the most famous faces of the financial crisis in France.

The ex-trader has said his bosses encouraged him to take risks and his lawyer has painted him as a "pawn." SocGen says he acted alone and denies tacit complicity.

"We encouraged traders to know how to take risks. We did not encourage them to take risks," said Mustier, who quit SocGen last August amid an insider trading probe that also targeted non-executive director Robert Day.

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Starbucks Adapts To Gallic Tastes In Growth Quest

By Lionel Laurent

PARIS | Thu May 27, 2010 9:49am EDT

(Reuters) - Coffee chain Starbucks Corp is changing its ways in France and trying to adapt to the local palate as it tries to break with past losses.

The group's French outlets have recently started to offer well-known local fare like the "cafe gourmand" -- a single shot of espresso served with three delicate pastries including a mango macaroon.

It is a far cry from the 12-ounce cups of American coffee and chunky muffins that made Starbucks a worldwide brand, but after years of losses in France the $20 billion group is having to make concessions to the local cafe culture.

Achieving international success in markets like continental Europe and Asia is seen as crucial for Starbucks as it seeks to drive growth outside a saturated home market.

"We in France don't drink coffee all day long and flavored coffee is not in our culture," said Bernard Boutboul, head of food retail consultancy Gira Conseil.

Starbucks needed to "Gallicise" its menu if it wanted to succeed in France, Boutboul said.

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Rural Mayor Set To Head Credit Agricole

By Lionel Laurent and Matthieu Protard

PARIS, May 18 (Reuters) - French bank Credit Agricole (CAGR.PA) is widely expected to name rural mayor Jean-Marie Sander as chairman on Wednesday amid tough economic times.

The bank is under pressure to reassure investor confidence after missing first-quarter profit expectations on the back of rising loan provisions in Greece.

Sander, a 60-year-old farmer who is also mayor of the small commune in the northeastern Alsace region where he was born, will be the last key appointment in Credit Agricole's management overhaul as it seeks to turn the page on the financial crisis.

A more reserved figure than outgoing chairman Rene Carron, who has reached the age limit of 67, Sander's strong ties to the Alsace region and his family's farming origins mark a symbolic return to Credit Agricole's agricultural roots after the crisis.

"It's clear Sander is a big backer of the agricultural cooperative model and its values," said a colleague of Sander's, who said the mayor brewed his own hops and sold them through a cooperative.

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French Banks Among Worst Hit By Capital Uncertainty

By Lionel Laurent - Analysis

PARIS | Mon Apr 12, 2010 2:49pm BST

(Reuters) - French banks may be among the most exposed in Europe to tighter capital requirements due in 2012, despite having emerged relatively unscathed from the global financial crisis.

Fears that stricter guidelines will leave French banks like Credit Agricole (CAGR.PA) and Natixis (CNAT.PA) short of billions of euros in core capital have hurt their share valuations and are likely to persist until more clarity emerges.

France is not alone. Banks across Europe are expected to need $65 billion (42.2 billion pounds) in fresh capital to meet so-called "Basel III" proposals, according to one study by UBS. The proposals are still at the consultation stage.

But Credit Agricole and Natixis seem more exposed than many others because of their cross-shareholdings in regional and cooperative banks, which Basel may disqualify as core capital.

"The market has priced in more risk for the capital of cooperative banks than for other banks," said Vincent Durel, a Fidelity fund manager who manages some 300 million euros (265 million pounds) in assets.

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Regulation To Trigger Bank M&A -Rothschild Exec

By Lionel Laurent and Julien Ponthus

PARIS | Wed Mar 17, 2010 8:36pm IST

(Reuters) - Expected tighter capital restrictions on banks will likely trigger a wave of consolidation in the sector by pressuring firms to slim down, a managing partner of investment bank Rothschild & Cie told Reuters.

The cost of carrying more capital will push banks to become more focused on their best-performing business lines, paving the way for asset sales and a move away from diversified business models, Francois Henrot said in an interview.

"The fact the regulator is now forcing them to set (more) capital aside will push them to make a choice," said Henrot, adding banks would no longer be able to afford operating dozens of businesses from property and insurance to payment services.

New proposed rules from the Basel Committee on Banking Supervision, known as Basel III, are aimed at increasing the amount of capital and liquidity banks must hold and lessen the need for more taxpayer bailouts in future crises.

They are due to come into effect by 2012, but uncertainty over their precise content -- which is still at the consultation stage -- has put the brakes on deal-making in the financial sector, said Henrot.

"It's very difficult today to do big transformative deals in the banking sector when you don't know which rule you will be subject to," he said.

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Top French Firms Feel Heat From Online Satire

By Lionel Laurent

PARIS | Tue Jan 5, 2010 7:45am EST

(Reuters) - The rise of video-sharing websites such as YouTube and Dailymotion is proving to be a headache for some of France's biggest companies as their image comes under fire from satirical online videos.

The aim behind humorous video clips can vary -- some are made by film producers as publicity stunts, others simply for fun -- but the potentially global impact and unpredictable nature of the clips can make them difficult for companies to contain.

"Brands were in the mindset of having one message, one broadcast," Emmanuel Vivier, chief executive of marketing agency Vanksen, said. "Now people reply to the brands' messages, remix them, redistribute them... impacting their reputation.

"It's becoming harder and harder to tell the difference between a real advert and a fake one," he said.

French grocer Carrefour, the second-biggest retailer in the world, was last month forced to disown and condemn a fake video advert that implied its discount food range contained human remains.

The video, which first appeared on Google site YouTube in early December, depicts an angelic little girl munching reluctantly on her grandmother's bones as her parents egg her on.

"It was a concern for us," a Carrefour spokeswoman said. "It did not give a good image for the brand."

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