French banks step up fight against new Postal Bank
French banks are redoubling efforts to fight planned legislation that would expand the range of financial services offered by the country’s state-owned postal service. Established banks say La Poste’s 17,000-strong branch network equals the distribution size of France’s top four banks and would severely skew competition. The new law allowing La Poste to launch a fully-owned credit unit passed a first reading in the French Senate and will now go to the National Assembly. A planned second reading at the end of this month was postponed until May. Although La Poste already offers a range of banking services it says current rules leave it with a financially weak client base comprising mainly the very young and very old. It has checking accounts and debit cards but can only offer mortgages to existing clients who already hold one of its home loan savings plans. It complains that while it benefits from a high proportion of children’s savings these clients are often lost when they reach adulthood and need to go elsewhere to borrow money to buy a car or a property. Once the new rules are in place La Poste will be free to offer home loans to anyone and hopes to do so from 2005.
