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.

The future of tennis: Game, set and number-crunch?

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By Lionel Laurent

LYON, France | Thu Apr 5, 2012 4:41am EDT

(Reuters) - Budding tennis stars who dream of being the next Novak Djokovic should think twice before shelling out for more coaching when they might better invest in the racket that tracks every move.

Created by venerable French tennis company Babolat, which started out in 1875 making strings from animal gut, the soon-to-be-unveiled prototype invention is designed to look and feel just like a regular, hollow-tube racket.

The twist is that the frame is lined with tiny sensors recording reams of data on every volley, lob, serve and drop shot. Uploading this information to a separate monitoring device will allow players to pore over the finer points of their performance without a coach or high-end video equipment.

It could be a big leap forward for a sport where rackets are often seen in a reverential, almost mystical light, and where critical distance and scientific analysis are left to the pros.

"There is an imaginary side to a player's racket, that it's like Excalibur, the sword that will win it all," says Eric Babolat, the company's grey-haired but youthful-looking 42-year-old chief executive, at his offices in Lyon, southeast France.

"We feel that people are looking for more rationality, more information on what is actually happening."

From Middle East to France, a Jewish school's journey

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By Lionel Laurent

PARIS | Mon Mar 19, 2012 2:38pm EDT

(Reuters) - Rabbi Jean-Paul Amoyelle, head of the Ozar Hatorah network of Jewish schools in France, was woken at 4 a.m. during a visit to New York with chilling news.

Jewish schools and synagogues in France had been targeted in a string of attacks in the past decade, many of them arson, but this was different.

A gunman had shot dead three children and a 30-year-old Hebrew teacher at his school in Toulouse, one of 20 in France with roots in the diaspora of Middle Eastern Jewry.

The shooting marks a tragic turn for Ozar Hatorah, which was created in the wake of the Holocaust in the mid-1940s by a Syrian-born Jew intent on improving the lot of Jewish communities in the Middle East and North Africa.

In 2001 a classroom was burned down at a "Ozar Hatorah", or "Treasure of the Torah", school in the Paris suburb of Creteil, but the perpetrator turned out to be a pupil.

Amoyelle said Monday's attack was a sign of growing danger.

"This was deliberate. Anti-semitic and deliberate, I have no doubt," Amoyelle said by telephone as he was due to return to France. "I plan to install a zone of reinforced security."

Europe no handicap for golfer-turned-banker

(Full story)

By Lionel Laurent

PARIS, March 15 | Thu Mar 15, 2012 8:23pm IST

(Reuters) - Economic growth is flatlining in Europe, household spending is in a funk and retailers are cutting prices - the perfect time to invest in consumer brands that can defy the downturn, professional golfer-turned-banker John Penning says.

The 39-year-old, who traded in his clubs for a life of finance after mingling with bankers on the putting green, has made his latest private-equity bet in the euro zone, taking over a chain of warehouse stores selling second-hand furniture and electrical goods mainly in France, the Benelux countries and Spain.

Penning's Saphir Capital bought Troc, which he describes as a "second-hand IKEA," for under 100 million euros ($130 million). The investment is small compared with the world's biggest furniture retailer, which made more than 200 times that amount in 2010 sales.

But the deal is part of a wider strategy for Penning, who also owns a stake in Frey - a French developer of retail parks in France and Spain - and is looking at other opportunities in the French consumer goods sector.

"I'm still excited about the euro...What is very good is strong brands," Penning told Reuters at an event to present Troc's strategy, which involves opening new stores and increasing the amount of brand-new goods sold while still retaining a primary foothold in second-hand products.