C.Agricole CEO eyes solid 2010 growth

LONDON (Reuters) - The outgoing chief executive of Credit Agricole (CAGR.PA) told the Reuters Global Finance Summit that he was leaving France's biggest retail bank well-placed for 2010 and set for solid growth at its core domestic business.

"All this retail business in France is strong and we expect continued growth in net banking income," Chief Executive Georges Pauget said on Monday, adding that Agricole would outperform rivals such as BNP Paribas (BNPP.PA) and Societe Generale (SOGN.PA) in the French retail banking sector.

Agricole has around a 25 percent share of the French retail bank market, making it the leader in the sector.

Over the last two years, Agricole has refocused its attention on its historic retail banking arm, at the expense of its investment banking division Calyon, which ran up a series of losses in the wake of the global financial crisis.

Some analysts have said cutting back on Calyon could mean that Agricole could make less money from a market recovery compared to the likes of BNP or SocGen, which have larger investment banking operations.

However, Pauget was comfortable about this and he was happy for Calyon to have a second-tier investment banking position.

"It's not our target to be number one in CIB (corporate and investment banking)."

"We have chosen to limit our profile."

In spite of Calyon's recent losses and job cuts at the unit, Pauget expected the company to return to profitability during either the current quarter or early 2010.

Calyon has moved away from the equity derivatives business, but Pauget said its remaining three areas of corporate finance, fixed income and equity brokerage, were holding up.

"I think that we will see that these three pillars are working, in the months to come."

SHUNNING THE BRITISH BANKING MARKET

Earlier this month, Agricole reported a third quarter net profit of 289 million euros ($432 million) -- down 21 percent from last year but still ahead of market forecasts.

Pauget reiterated that Agricole, which last month denied a report in Le Monde newspaper of plans to merge with SocGen and insurer Groupama, was not targeting large takeover deals.

He said Agricole had conducted some internal studies on how to deal with forthcoming changes in the sector due to new regulations on capital requirements, but would focus for now on organic growth.

Pauget said there were no plans to break into the British banking market, where the UK government hopes a string of retail assets being sold by Royal Bank of Scotland (RBS.L) and Lloyds (LLOY.L) to appease European Union antitrust concerns will boost competition.

Between them, RBS and Lloyds will sell more than 900 bank branches -- a potential foothold for a new entrant.

"The UK market is complex and difficult for continental banks," Pauget said. "Santander has succeeded, but it could be different for other players and I consider that Credit Agricole is not ready to invest in the UK."

Pauget said Agricole would focus on markets where it already has a presence and did not exclude deals in Italy, where the bank has a presence through its Cariparma division.

Asked if Cariparma could buy more branches, Pauget replied: "It's not impossible but it's not a priority."

Pauget will be replaced as Agricole CEO next march by company insider Jean-Paul Chifflet [ID:nLA490980] and he said Chifflet would inherit a company performing well.

"It's a company which is in good shape. It's a very solid bank."

($1=.6685 Euro)

(Reporting by Sudip Kar-Gupta; Editing by Simon Jessop)