Credit Lyonnais warns of long wait

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The Independent Online
JEAN PEYRELEVADE, chairman of Credit Lyonnais, said yesterday that privatisation of the bank was now too far in the future to be worth thinking about.

At a briefing in London on the bank's half-year loss of Fr4.5bn ( pounds 550m), Mr Peyrelevade said: 'I have to restore the bank to profitability. We need 1995 and more likely 1996 as well to be certain Credit Lyonnais is back on its feet.'

If bad debts from the past are excluded, the bank is breaking even this year, Mr Peyrelevade said.

The capital markets and investment banking business is still in the black but down to Fr200m profit from Fr1bn a year earlier because of difficulties in bonds. But in London, capital markets made pounds 14m, the same as a year earlier, and the second half has continued healthy.

Credit Lyonnais has begun discussions with the government about how present trading can be insulated from the overhang of past losses. The bank's financial problems range from the MGM film studios to the French politician and financier Bernard Tapie.

Mr Peyrelevade denied that he had told French financial analysts on Friday that the government would take all the doubtful assets off the bank's balance sheet.

This led to a sharp rise in Credit Lyonnais's share price on Monday. The French stock market supervisors are inquiring into whether the analysts were given information not announced to the market. 'That sentence was never pronounced,' Mr Peyrelevade said.

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