French banks draw up Greek exit plans, sources say

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By Lionel Laurent and Christian Plumb

PARIS | Fri May 25, 2012 4:12pm BST

(Reuters) - French banks, which are among the lenders most exposed to Greece, have stepped up their efforts on contingency plans for the debt-laden country leaving the euro zone, sources familiar with the situation said.

The heightened preparations by banks, including Credit Agricole (CAGR.PA), BNP Paribas (BNPP.PA) and Societe Generale (SOGN.PA), come after euro zone sources told Reuters earlier this week that each member of the common currency would have to prepare a plan for a possible Greek exit.


"Every bank has a task force right now looking at the potential consequences of a return to the drachma," a Paris-based banker said.

At end-Dec 2011, total French cross-border lending to Greece was $44.4 billion (28.3 billion pounds), higher than Germany's $13.4 billion, according to preliminary Bank for International Settlements data tracking consolidated foreign claims of reporting banks on an ultimate risk basis.

"The banks are doing contingency planning concerning a Greek exit, but you can understand why they wouldn't say so publicly," a consultant to French banks said.

President Hollande's savings raid spooks banks

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By Lionel Laurent

PARIS | Fri May 18, 2012 11:35am BST

May 18 (Reuters) - French President Francois Hollande's plan to use savers' deposits to boost state investment power could suck billions of euros out of banks, depriving them of a major source of funding as they struggle through the euro zone debt crisis.

The centre-left president, marketing himself as a pro-growth alternative to German-led budget austerity, has pledged to double the amount people can put into tax-free, state-guaranteed savings accounts before the end of June.


The government aims to use money from these expanded accounts - which Hollande has promised will pay interest at an attractive above-inflation rate - to help fund additional building and infrastructure projects.

However, while the move may provide an expansionary pick-me-up to the economy and please hard-pressed French savers, it could spell trouble for lenders like BNP Paribas and Societe Generale.
Already on the defensive from regulations designed to crack down on risk, French bankers fear an exodus of deposits from their own savings accounts to 200-year-old state lender Caisse des Depots et Consignations (CDC), reducing their access to cheap funding.

Cheuvreux analyst Pascal Decque estimates French banks could see up to 83 billion euros ($106 billion) make their way to CDC, founded in 1816 when France was in dire economic straits after the Napoleonic Wars.

"You've got funding pressures on all types of areas for the French banks," said Espirito Santo analyst Andrew Lim. "(Hollande's plan) is going to put pressure on market deposits." 

French whizzkid trader at centre of JPMorgan bets

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By Matt Scuffham and Lionel Laurent

LONDON/PARIS | Fri May 11, 2012 2:44pm EDT

(Reuters) - Bruno Iksil was dubbed the 'London Whale' in credit markets due to the size of the trading positions he took, but for years he stayed well below the surface avoiding detection.
Now, the French-born JPMorgan trader has been dragged from the anonymity of the trading floor into the eye of a very public storm over a $2 billion trading loss at the U.S. investment bank where Iksil worked in a little-known group called the Chief Investment Office (CIO).

Friends, colleagues and fellow traders describe an unassuming man, a far cry from the brash image normally associated with traders staking huge bets in fast-moving financial markets, including derivatives.

"He's a really nice bloke. A quiet bloke. He's not an arrogant trader, he's quite the opposite. He's very charming," one former colleague at JPMorgan said of Iksil, whom he said was married with "a couple of kids".

Iksil, who graduated in engineering in 1991 from the Ecole Centrale in Paris, looks older than he is, seldom wears a suit, and according to ex-colleagues lives outside central London.

"He's a balding chap with grey and dark hair. I'd say he's in his 40s," the ex-colleague said, adding that there were not many young traders in CIO, a relatively isolated group where everybody was in their thirties and forties.

"Nobody wears suits in CIO. You don't meet clients face to face," he added.

There have been no suggestions that Iksil's activities were in any way irregular, but over a period of years he and his team amassed a book of bets estimated by some to be $100 billion.

Sarkozy era ends after 5 years

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By Lionel Laurent and Catherine Bremer
PARIS, May 6 (Reuters) - Socialist Francois Hollande swept
to victory in France's presidential election on Sunday in a
swing to the left at the heart of Europe that could start a
pushback against German-led austerity.

Hollande was set to beat conservative incumbent Nicolas
Sarkozy by a decisive 51.9 percent to 48.1 percent margin, the
TNS-Sofres polling agency said in a projection based on a
partial vote count.

The president conceded defeat within 20 minutes of the last
polls closing at 8 p.m. (1800 GMT), telling supporters he had
telephoned Hollande to wish him good luck.

"I bear the full responsibility for this defeat," he said.

Sarkozy, punished for his failure to rein in record 10
percent unemployment and for his brash personal style, is the
11th successive leader in the euro zone to be swept from power
since the currency bloc's debt crisis began in 2009.

Jubilant left-wingers celebrated outside Socialist Party
headquarters and in Paris' Bastille square, where revelers
danced in 1981 when Francois Mitterrand became France's only
other Socialist president.

But the celebrations may be overshadowed by a political
bombshell in Greece, where mainstream parties were hammered in a
parliamentary election that exit polls suggested may leave
supporters of Athens' IMF/EU bailout without a majority, raising
doubts about its future in the euro zone.

France's property sugar rush fizzles out

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By Lionel Laurent

PARIS | Fri May 4, 2012 9:29am EDT

May 4 (Reuters) - French banks are facing a big drop-off in mortgage lending this year as a sickly economy and falling property prices put the brakes on a borrowing binge by homebuyers.

Home financing was a sugar rush last year for lenders like BNP Paribas and Societe Generale, driving loan growth and retail revenues as rock-bottom interest rates lured investors to the housing market.

Mortgages also helped banks defend their record of lending to the French economy in the run-up to Sunday's presidential election, which has seen Socialist frontrunner Francois Hollande pledge to curb lenders' risky activities and make regulated savings deposits more attractive.

The picture for real estate looks less rosy for 2012.

Annual mortgage production is seen slumping by 20 to 30 percent, against a backdrop of a decline in house prices that could reach 15 percent over the next two years, according to research from Standard & Poor's.