French banks resist post office expansion
French banks are resisting plans by the state-run post office to extend its financial services products.The chairmen of Frances three largest listed banks, Crédit Agricole, BNP Paribas and Société Générale visited Francis Mer, the finance minister, last week to voice their opposition to plans by La Poste to market stand-alone mortgages through its network of more than 17,000 offices. Under its current statutes, the post office can only offer mortgages to holders of special property-linked saving schemes.
The assault is backed by the Fédération Bancaire Française
(FBF), the banking sector?s trade association. Philippe Dupont, FBF chairman, threatened to complain to European Union competition regulators in Brussels.
Commercial banks claim they cannot compete against a state-run institution that
has no pressure to make profits.
La Poste has hired JP Morgan to advise it on diversification. Among the new
products it is considering are consumer loans and insurance contracts. Under existing legislation, La Poste is only allowed to offer current accounts, money transfers, life insurance and savings products. Its retail network is by far the country?s largest, with more than double the branches of its nearest competitor, Crédit Agricole.
The post office has always had tense relations with private sector banks. They
accuse it of benefiting from unfair competitive advantages linked to its public status.
It shares an official duopoly with Caisse d?Epargne, the mutually owned savings
bank, on the Livret A, a savings account that pays risk-free above-market interest rates subsidised by the state. Livret A is by far France?s most popular savings product, held by four-fifths of the population.
La Poste argues that it might not survive the loss of its monopoly on postal
services as a result of pan-European postal deregulation if it is not allowed to find alternative sources of revenues.
