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Business

French Senate approves key banking merger

Text by NEWS WIRES

Latest update : 2009-06-09

France's Senate approved a merger between Caisse d'Epargne and Banque Populaire on Tuesday, clearing the way for the creation of France's second-biggest bank. It was passed by the lower house of parliament in May.

AFP - France's parliament cleared the way on Tuesday for the creation of France's second-biggest bank by approving a merger of the groups Caisse d'Epargne and Banque Populaire.

Lawmakers in the upper house Senate approved the move by 187 votes to 154. It was passed by the lower house in May.

"This union will give birth to the second biggest French banking group," with 7,700 branches and 34 million customers, said Roger Karoutchi, a secretary of state for parliamentary relations.

The new entity could be up and running by July, pending approval by competition authorities and employees' representatives, said trade secretary Herve Novelli.

In February Caisse d'Epargne named Francois Perol, a senior aide to President Nicolas Sarkozy, as chief executive of both groups. His appointment caused political controversy because of his closeness to Sarkozy.

Caisse d'Epargne reported a loss of 2.0 billion euros (2.6 billion dollars) in 2008, largely because of its investment banking unit Natixis which was hit by the global financial crisis.

Under the tie-up, the French state is to put five billion euros into the new group and will have a say in how it is run.

Date created : 2009-06-09

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