BNP Paribas, Societe Generale Pay Price For Domestic Market Slump

BNP Paribas, Societe Generale and Credit Agricole, which spent much of the European-crisis years fixing operations outside France, are now counting the cost of the economic slump at home.

Bloomberg reports that after shrinking units, reinforcing capital and seeking more stable funding sources for their businesses in the so-called euro-area periphery, the banks - which report first-quarter results starting this week - are contending with slowing lending growth, rising bankruptcies and doubtful-loan losses in France, their biggest market for deposits and revenue.

With French economic growth stalled over the last two years and joblessness at a record high, the total retail-banking revenue at the country’s top five lenders - including Groupe BPCE and Credit Mutuel-CIC - last year declined for the first time in two decades, and $6.5bn in operating profit from such business may vanish by 2015, according to Munich-based Roland Berger Strategy Consultants.

'It’s the end of an Eldorado', Fabrice Asvazadourian, a senior partner in Paris for Roland Berger, said in an interview. 'It’s an industry that was accustomed to growth, and now there’s a sudden, sharp brake'.

Hit the link below to access the complete Bloomberg article:

BNP Like SocGen Braces for French Eldorado End as Economy Slumps

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image: © Neil Willsey

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