French Commercial Banks

With more than 26,000 permanent bank branches, France has one of the strongest banking industries in Europe and around the world.

The French Banking Law dates back to January 1984, further supplemented by the 1996 Law on the Modernization of Financial Activities. The legislation is based on the principles of a single legal framework for all banking activities and the common profession of credit establishments.

Banking activities in France are controlled by the Committee for Banking and Financial Control and the Committee for Credit Establishments and Investment Firms, under the Ministry of the Economy and Finances and the Governor of the Banque de France. The control of bank solvency is under the authority of the Banking Commission while the Central bank is the “Lender of Last Resort.”

The main characteristic of the French banking industry are the diversification of the banking system, along with a significant concentration, due to decrease in the number of establishments. The principal banks hold most of the market share while banking institutions boast competitiveness and openness to foreign investments and customers.

The French banking system revolves around three major networks - the French Banking Association AFB, the mutual and cooperative banks, and the Treasury, including the French Postal Services and the Caisse des Dépôts et Consignations (the State bank manages national savings and local community funds).

The French banking industry underwent significant reforms beginning the 80s of the 20th century. They led to its liberalization and modernization, expansion of transactions and financial markets, and increased competition between various financial institutions. Reforms also resulted in lessened role for the State and the acceleration of the restructuring process. As of October 2008, the banking industry in France has an average leverage ratio of 28 to 1, its short-term liabilities equal 60% of the French GDP or 128% of its national debt.

The main banking groups are: Société Générale, Crédit Agricole, Natixis, BNP Paribas, and Crédit Mutuel. BNP Paribas and Crédit Agricole rank among the top ten on a global scale in view of total assets, Société Générale is the 3rd largest corporate and investment bank at the Eurozone while the Natixis group provides financial data to the news channel Euronews. Crédit Lyonnais, Société Généraleare, BNB Paribas are the "three old" banks of France. Since January 2006, in addition to carrying the mail service of France, La Poste offers banking services through its Bank Postale and the 17,000 post offices nationwide.

Crédit Agricole is the leading French bank by the size of its assets. The body is the eight largest in the world by Tier 1 capital. It is a semi cooperative bank, and its subsidiaries are: Calyon, the investment banking division created in 2004 (by the transfer of assets from Crédit Lyonnais to Crédit Agricole Indosuez), Calyon Financial, CLSA, the Asian securities brokerage division, Predica and Pacifica, the insurance divisions, LCL, previously Crédit Lyonnais and a nationwide retail bank acquired in 2003.

Natixis was created in November 2006 through the merger of a group of cooperative banks, Banque Populaire and IXIS - Caisse d'Epargne group. The company deals with corporate and investment banking, asset management, private equity and private banking, services business lines, and receivables management.

BNP Paribas, whose roots date to 1869, is the largest commercial bank in France, having a nationwide retail network. Crédit Mutuel is a mutual credit bank and the fourth largest banking institution in the country. The body is the parent company of Crédit Industriel etc. Commercial, which specializes in retail services for foreigners moving to France - mortgages, consumer credit, saving and bank accounts, car and home insurance.

HSBC France is the French division of the UK bank HSBC, created in 2005 by the rebranding of Crédit Commercial de France and its subsidiaries. This bank deals with corporate, investment banking, markets, and private banking. Other services include: mergers and acquisitions advice, specialized finance, fixed income products, foreign exchange, equity brokerage, equity derivatives, insurance and employee savings.

Société Générale, founded in 1864, offers mutual funds, investment funds, company savings plans, asset management, private banking, both locally and internationally. In France, Société Générale is also very active in the field retail banking.

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