June 23, 2011
When the French government went to its banks Wednesday to sound them out about rolling over their holdings of Greek debt, two of the country's major financial institutions had good reason to listen.
Both Crédit Agricole SA and Société Générale SA own stakes in embattled Greek banks, part of failed efforts to boost their growth.
Crédit Agricole bought a piece of Emporiki Bank of Greece SA and Société Générale invested in Geniki Bank last decade, hoping they would gain them entry into a promising new region.
It didn't work out that way. The two Greek acquisitions are now money-losing burdens and were key features in a downgrade review issued last week by Moody's Investors Service.
"Now it's too late for them to sell, and they have to take the sting right to the end," says Dirk Hoffmann-Becking, an analyst at Bernstein Research. "Who's going to buy them?"
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