Credit Agricole Slims Down With Private-Equity Sale

(Reuters was alone in getting the price-tag of the deal)

By Lionel Laurent and Simon Meads
PARIS/LONDON, Dec 16 (Reuters) - Credit Agricole , is selling its private equity unit for more than 300 million euros ($390 million), a banking source close to the deal said, as the French bank looks to cut its exposure to risky assets.
In spite of large disposals in 2011, banks still have tens of billions of dollars in private equity assets. That raises the prospect of more sales as they try to shrink balance sheets.
The sale to Coller Capital, a British-based firm which specialises in buying secondary private equity assets, will reduce the risk-weighted assets of Credit Agricole by 900 million euros, the French bank said on Friday.
That is a fraction of the 30 billion euros in risk-weighted assets the bank -- which this week announced its second profit warning of the year -- has said it aims to ditch by January 2013.
"In terms of risk-weighted assets, it is peanuts compared with Credit Agricole's total of 370 billion," said one London-based analyst.
"But it is another sign that banks are unwinding all the kinds of activities that were very sexy during the leverage boom. This kind of thing takes up management time and has an unfavourable impact under Basel III."

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What's In An AAA? Use Your Judgment, Investors Say

By Lionel Laurent and Sinead Cruise
PARIS/LONDON, Dec 15 (Reuters) - In a world where the United States no longer has a AAA and big economies like France and Germany risk losing theirs, investors are increasingly relying as much on their own judgement of top-bracket creditworthiness as on the opinions of ratings agencies.
While two of the largest agencies, Moody's and Standard & Poor's, have been criticised by governments and banks for recent downgrades and threats of ratings cuts, investors say loss of the cherished AAA no longer means an instant "sell".
Critics fear the credit ratings industry is at risk of making rash calls as it fights to restore its credibility after grave mistakes in evaluating billions of dollars of subprime mortgage debt in the run-up to the 2008 financial crisis.
Once the first port of call for funds assembling new portfolios, managers are increasingly sidelining agencies in favour of their own research and are consulting clients to decide if they remain comfortable holding an investment, whether it comes with the top rating or not.
"More and more we are having conversations with clients, as opposed to selling something instantly that falls below that criteria," said Jennifer Gillespie, head of money market funds at Legal & General Investment Management, which runs around 15 around billion pounds ($23.4 billion) of assets in cash and liquidity strategies.
"You cannot be so black and white because the average credit rating of money-market instruments is not AA or AA-plus, it is getting closer to A," she said.

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SocGen To Cut 700 Jobs In Americas, Asia -Union

(Reuters exclusive)

By Lionel Laurent and Matthieu Protard
PARIS, Dec 2 (Reuters) - French bank Societe Generale is to cut 700 jobs at its American and Asian operations as it pulls back on U.S. dollar lending to cut debt and strengthen its balance sheet, two trade-union sources said on Friday.
The latest sign of retrenchment at French banks comes as the eurozone debt crisis reaches boiling point and as Europe's banks take fresh measures to restore investor confidence and meet tougher capital targets by mid-2012.
"They (SocGen) gave in New York a figure of 700 job cuts across the Americas and Asia," said Michel Marchet, a Paris-based CGT union representative.

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NEWSMAKER-Prudent Merger Man Takes Helm At France's BNP

By Lionel Laurent
PARIS, Dec 2 (Reuters) - Jean-Laurent Bonnafe's rise to become chief executive of French bank BNP Paribas was perfectly scripted and the bespectacled rugby fan knows the bank better than anyone after a decade hammering its acquisitions into shape.
Outwardly shy 50-year-old Bonnafe was flagged back in February as the replacement for the flamboyant Baudouin Prot, who steered the bank through the financial crisis and now takes the chairman's seat from Michel Pebereau.
Taking over the day-to-day running of the biggest bank in the euro zone at the height of the crisis in the region will test Bonnafe's improvisation skills.
He will need to juggle sweeping asset sales, job cuts and a pullback in lending in response to regulatory demands for banks to hold more capital as a buffer against future downturns.
For the ex-BNP banker who first hired him in 1993, Bonnafe's past experience and his time spent working under Prot and Pebereau, mean he is up to the challenge.
"I put great trust in a trio of men: Michel Pebereau, Baudouin Prot and Jean-Laurent Bonnafe. If the first two picked the third to take charge of the bank's future then I'm sure it's the right choice," Ervin Rosenberg told Reuters.
"Bonnafe will be entirely able to meet the difficult task ahead of him."

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