The inauguration on 2 January 2006 of the Banque Postale (a subsidiary of La Poste, the national mail service) was not favourably looked upon by the leading French banks which immediately criticised the creation of the largest bank network in France.

Brussels gave the green light last December 21st, three weeks after the French banking authorities gave theirs and the leading French banks have been up in arms ever since. The directors of the main banks were quick to respond in the press with strong objections to the creation of a tenth retail bank network and the press reported criticisms about the "Livret A" monopoly of La Poste and the Caisses d'Epargne. Société Générale PDG, Daniel Bouton, also stated that the banks could offer this service at a lower cost to the taxpayer and social housing financing. This strong reasoning did not seem to convince the authorities who are delaying in pronouncing any judgement. Mr. Bouton added that the Banque Postale was created not so much out of public interest but more as a way of saving the future of La Poste by helping it to cope with decreasing regular mail service.

La Poste had only good things to say about its new service which is part of the company's development project, even if the French do not necessarily see the national Post Office as an industrial company. Anxious to appear faithful to its founding principles, La Poste tried to reassure the public by stating its main objectives: "To always be the least expensive of the leading banks"and "to increase its market share from 4.5% to 9% within the next five to ten years."

Judging by the negative remarks reported in the press, La Poste still has to prove that it is capable of doing what it says, hold on to the clients it has and try to enlist new ones. To do this, it has to overcome two major problems. First, it must find solutions to its main flaw: the interminable wicket queues. The press reported that La Poste had not, so far, set up separate wickets in its 17 000 outlets in France. Secondly, it has to reckon with the Crédit Agricole with its 22 million clients and which has a common network and clientele with La Poste throughout France. The press also reported on the joint action by the Crédit Agricole, the BNP Paribas, the Société Générale and the Group Banque Populaire to the European Commission on permission to distribute the "Livret A". Disloyal competition or not, the French will now have to deal with a new banking entity.

Sylvie Testard-Ramirez, Managing Director of Echo Research France
Analysis and commentary by Echo Research : www.echoResearch.com on the basis of 71 articles which appeared in the national French daily press online.

Green light for France's post office bank

30/11/2005
France's planned Postal Bank received official operating authorization Wednesday, allowing it to serve some 28 million clients who currently use the financial services of the postal system.
The bank, expected to begin operations by January 1, 2006 at the latest, won approval from the CECEI, a committee that supervises the activities of credit and investment establishments.
In a swift response, four leading French banks said in a joint statement they would bring the matter before the European Union's executive commission, arguing that "the creation of the Postal Bank will introduce multiple competition distortions."
The four banks taking the action are BNP Paribas, Banque Populaire, Credit Agricole and Societe Generale.
They are said to be concerned about the financial arrangements linking the post office and the Postal Bank, as the bank will be able to make use of the customer counters and the sales staff -- including 7,000 financial counselors -- of the post office.