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By Lionel Laurent
PARIS, Feb 10 (Reuters) - A declaration of war against the world of finance by French Socialist presidential front-runner Francois Hollande is threatening a rally over the past month in the shares of France's top banks.
Although a wave of cheap funding from the European Central Bank has pushed back the likelihood of a eurozone break-up and restored some confidence in French banks, the prospect of Hollande becoming the first Socialist president in 17 years is worrying some in the markets.
Hollande, a bespectacled career politician who has called finance his biggest foe, has sketched the broad outlines of measures including an extra tax on banks, separating their socially useful activities from those seen as speculative, and a ban on what he calls toxic loans.
The proposals are vague - and there are some doubts as to what extent they would be implemented if Hollande finds himself in the Elysee Palace in May - but they could cut fairly deeply into banks' profits at a time of already sluggish growth.
Keefe, Bruyette & Woods, an investment bank, estimates their impact at around 10 percent of annual earnings for top banks including BNP Paribas and Societe Generale, or a combined 1.7 billion euros ($2.3 billion).
"The measures are a bit fuzzy in our view, and these kinds of worries mean that if the rally continues I doubt French banks will be investors' preferred choice," said Marco Bruzzo, head of Mirabaud Gestion, an asset management company, in Paris.
By Lionel Laurent
PARIS, Feb 10 (Reuters) - A declaration of war against the world of finance by French Socialist presidential front-runner Francois Hollande is threatening a rally over the past month in the shares of France's top banks.
Although a wave of cheap funding from the European Central Bank has pushed back the likelihood of a eurozone break-up and restored some confidence in French banks, the prospect of Hollande becoming the first Socialist president in 17 years is worrying some in the markets.
Hollande, a bespectacled career politician who has called finance his biggest foe, has sketched the broad outlines of measures including an extra tax on banks, separating their socially useful activities from those seen as speculative, and a ban on what he calls toxic loans.
The proposals are vague - and there are some doubts as to what extent they would be implemented if Hollande finds himself in the Elysee Palace in May - but they could cut fairly deeply into banks' profits at a time of already sluggish growth.
Keefe, Bruyette & Woods, an investment bank, estimates their impact at around 10 percent of annual earnings for top banks including BNP Paribas and Societe Generale, or a combined 1.7 billion euros ($2.3 billion).
"The measures are a bit fuzzy in our view, and these kinds of worries mean that if the rally continues I doubt French banks will be investors' preferred choice," said Marco Bruzzo, head of Mirabaud Gestion, an asset management company, in Paris.
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