Future La Poste/Bank Alliance Possible

French banks Caisse des depots et consignations (F.CDC) and Caisse d’Epargne (F.CCE) promised to forge closer ties with La Poste (F.PST) Tuesday, but said bringing France’s national post office into their two-way alliance was impossible for the time being. ‘We can have very strong relations with La Poste in terms of partnerships, in terms of business but as far as a full industrial project is concerned, it’s not the right moment,’ CDC chairman Daniel Lebegue said at a press conference in Paris. The comments came as CDC and Caisse d’Epargne unveiled further details Tuesday of their EUR17 billion cooperation, including a joint company and a program to generate an extra EUR500 million in cost savings and additional revenue over the next four years. Pressure has been growing on the French government to reform La Poste, allowing it to spin off its banking activities and incorporating them into CDC’s new EUR17 billion alliance with Caisse d’Epargne. A French parliamentary committee is expected to urge such reforms when it presents a special report on the future of the publicly-owned financial sector to French Finance Minister Laurent Fabius Wednesday. CDC and Caisse d’Epargne have been reluctant to include La Poste in their tie-up because as a state-owned company it cannot swap shares and has no banking license. Spinning off La Poste’s banking activities would effectively remove these handicaps and allow the national post office to compete directly with private banks in France like BNP Paribas SA (F.BNP) and Societe Generale SA (F.SGF). CDC and Caisse d’Epargne already have close ties with La Poste, working together in a number of areas including insurance and asset management. Between them, the three groups own some 60% of CNP Assurances SA (F.CNP), France’s biggest pure life insurer. ‘We want to consolidate the partnerships we already have with La Poste either as it stands today or else as the Postal bank,’ said Charles Milhaud, chairman of Caisse d’Epargne. ‘No one can afford to disregard La Poste’s 18,000 outlets.’ La Poste is already a force to be reckoned with in French banking, with a 10% slice of the retail market and 15% of all checking accounts. However, the tie-up between CDC and Caisse d’Epargne – La Poste’s main partners – has raised fears in the French government the post office could be left with no clear way of growing its banking businesses.