French banks' battle to go a further round

THE BATTLE that has raged between France's three big banks for five months looks increasingly likely to go on into August.

France's stock market regulator, the Conseil des Marches Financiers (CMF), yesterday postponed for the second time this week a decision on the closing date for the 20 billion euro friendly merger bid by Societe Generale for Paribas and the rival 40 billion euro hostile bid by Banque Nationale de Paris for the other two banks.

It is expected to publish its ruling today. The delay has punctured hopes on both sides that the battle could be resolved within the next fortnight.

A plan to fix 21 July as the closing date for all three bids appears to have been rejected as unworkable. The banks were also last night awaiting the outcome of a meeting of anotherkey committee, the Comite des Etablissements de Credit et des Entreprises d'Investissement (CECI), which was due to rule on whether to approve last week's higehr offers by BNP for Paribas and SocGen.

Paribas and SocGen have been lobbying hard over recent days to convince the regulators that by raising its offer BNP had exposed itself to a serious risk of depleting the regulatory capital which it is required to set aside against unforseen risks to a dangerous degree.