Daniel Bouton, vice chairman of SG Paribas, said: "We would have a return on equity of 40 per cent if we worked with the prices and margins you have in the UK market."
Currently, French banks, including Societe Generale, which this week merged with Paribas to create the new French banking group, enjoy a return on equity of only 15 per cent, against Lloyds-TSB's 30 per cent.
M Bouton's claims came just a week after Don Cruickshank, the former telecoms watchdog, launched a year-long UK government-sponsored inquiry into the competitiveness of British banks.
Mr Bouton said Societe Generale was in fact far more efficient that its British rivals, but was less profitable than comparable British banks because unfair competition from state and mutual-owned banks kept banking margins in France uneconomically low.
He said he believed that Barclays and Lloyds-TSB were both looking to break into France by acquisition. But he warned the UK players that their experience in Britain did not prepare them for the tougher realities in France.
"You [in Britain] have a very special situation because of the high returns made by the predominantly retail banks," he said.
The problem for the banks in France, he said, was not so much getting costs down, as these were already relatively low, but to raise the income line.
At a meeting with the bank's 4,100 London-based staff last night, the two heads of the combined bank dismissed talk of job cuts of 20 per cent as scaremongering put about by headhunters.
A three-person committee was yesterday set up to oversee the integration of the investment bank. They will in turn appoint 15 working groups to advise them on specific areas of business.