FRANCE – Crédit Agricole Group and the Caisse Nationale des Caisses d’Epargne are in talks to combine their securities services businesses.

The talks, which would see a combined €570bn under administration and €1.2trn under custody, are likely to be finalised before the end of June.

Discussions began in December last year. Crédit Agricole’s managing director Jean Laurent said yesterday at the firm’s annual general meeting that negotiations could come to a conclusion before the end of June.

The partnership, targeting both the institutional and corporate sectors, would merge their subsidiaries into a “supervisory board and management board company”, the two firms said in a joint statement.

The new company, whose name has not yet been revealed, would be owned equally by CNCE and Crédit Agricole, which is expected to sell “the necessary number of shares of the new company” to its partner.

CNCE will also be offered an option on these shares, although CNCE spokeswoman Sonia Dilouya was unable to put a value to the deal.

Dilouya said the talks have been prompted by the synergies between Crédit Agricole Group and CNCE. “They have realised that the bigger they get the better they would be in this business,” she told IPE.

She also said the two groups have already embarked in talks with employees’ representatives, as required by law, although the fate of staff was not clear.

The groups said in the joint statement that they are aiming at establishing the new group as “the leading depositary bank for UCITS in France.”

The joint company would represent €300m of shareholder equity and is expected to achieve a net banking income topping € 450m in 2005 as well as a gross operating income of €95m.

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