Bank rivals in France appeal post office plan

A group of leading French banks said Thursday that they had appealed a decision by the French regulator approving plans of the state-owned mail service La Poste to open its own bank in January. The move, which is sure to intensify competition in the country’s banking industry, comes as other countries like Japan are seeking to break up the financial power of their post offices. In France, La Poste secured the approval on Wednesday of the Cecei, the country’s banking regulator, to set up its own retail banking operation. La Poste, the second-biggest European mail operator after Deutsche Post, already gets 23 percent of its revenue from financial services, including checking accounts and long-term savings.

The approval riled banking rivals Credit Agricole, BNP Paribas, Societe Generale and Banques Populaires, which are among the biggest French banks. The group has lodged an appeal with the European Commission to block the move, they said in a statement. ”The creation of a postal bank causes several distortions to competition,” the four banks said in the joint statement. The banks’ main complaint concerns the near-exclusive right of La Poste, which has about 9 percent of the French consumer banking market, to sell tax-free interest-bearing saving accounts, known as Livret A, which help finance public housing in the country. As a result, they stand to lose clients in the high-margin investment services market, as well as for home loans, a business that is benefiting from the buoyant real estate market. ”We must fulfill our ambitions with an original and profitable model of retail banking,” Jean-Paul Bailly, La Poste’s chief executive, said in a statement late Wednesday. The company, which currently has 12 million checking account customers, is spinning off its financial services business into a separate subsidiary with full banking status. The new bank will be able to sell home loans to clients without savings accounts for the first time, and may later offer consumer loans and property and casualty insurance, Patrick Werner, head of the financial services division, said in May. The new bank will employ 1,000 people, including 500 at its Paris headquarters, Werner said. La Poste will own 100 percent of the new unit.