French state to invest in banking merger: minister

23rd February 2009, Comments 0 comments

The government will add between EUR 2.5 and EUR 5.0 billion to support merger between Caisse d'Epargne and Banque Populaire.

PARIS – The French government is to provide between EUR 2.5 and EUR 5.0 billion in loans to support the merger of banks Caisse d'Epargne and Banque Populaire, Finance Minister Christine Lagarde said on Monday.

"The state will add between EUR 2.5 and EUR 5.0 billion in the form of subordinated loans," she told Europe 1 radio.

Subordinated loans are those that are paid back after other, higher priority obligations are met.

Caisse d'Epargne and Banque Populaire are this week expected to announce a merger that will create France's second largest bank, according to the French government.

Lagarde described the tie-up as "an intelligent" move that will give the new entity a "strategic size".

AFP / Expatica

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