UPDATE 1-German banks braced for Greek election fallout

* Banks eye potential fallout from Greek elections

* Banks have run scenarios, prepared for client queries

* Greece's path in or out of euro may not be quickly clear

* Credit Agricole has no plans for emergency meeting-source

* Fitch sees Grexit downgrade risk for Spain, Italy banks (Adds comment from Fitch, French banks.)

FRANKFURT, June 13 (Reuters) - German banks are preparing for a worst-case scenario should Greek voters choose a path that takes them out of the euro zone in elections on Sunday.

"If it looks like that is the election result the telephones will glow red in Frankfurt's banking towers," said a manager at a large German bank, who asked not to be identified.

Banks and other companies will quickly review their emergency plans, the manager said, anticipating questions like what happens if the markets collapse on Monday, what investment recommendations can be made to clients and what costs can be expected in payment systems if Greece switches back to the drachma.

Executives are reluctant to talk about their plans on the record, with HypoVereinsbank's chief executive Theodor Weimer one of the few to make a public comment.

"The management board decided today that we will meet on Sunday if the worst case occurs," he said in Berlin on Tuesday.

The situation with international payment transfers would be a main focus of the bank's leadership, Weimer said, as no one wants to be the last lender to transfer euros to Greece.

Sources close to Germany's two biggest lenders, Deutsche Bank and Commerzbank, said that no telephone conferences were planned for Sunday evening, even if anti-austerity parties carry the vote in heavily-indebted Greece.

In France, a Paris-based banking source said Credit Agricole , one of the most exposed to Greece via its Emporiki subsidiary, has no current plans to hold an emergency board meeting on Sunday.

Credit Agricole , BNP Paribas, France's largest bank, and Societe Generale did not immediately respond to requests for comments.

While the direct impact on most euro zone banks of a Greek exit would be modest, FitchRatings said in a report on Wednesday, banks in other countries under EU/IMF bailout programmes including Ireland, Spain and Portugal could be at risk of being downgraded after a Greek exit, as could Italian lenders.

"They are more vulnerable to contagion risks as these nations could be perceived "next in line" for a euro exit," Fitch said. "If the EU policy response fails to control contagion risks and if bank runs and capital flight were to become a reality, banks in these countries would be under severe stress."

Banks with units in Greece including Credit Agricole as well as Societe Generale and Portugal's Banco Comercial Portugues would also take hits in the event of a euro exit, although Fitch noted that SocGen's Geniki bank is " to o small to be of real concern for the parent, with funding exposure of only 168 mill i o n euros at e nd-2011."

The actual direction of the country will probably only become clear in the days after the election, said one bank manager.

Commerzbank said it had been grappling with the potential election fallout for some time.

"Our shareholders, our customers and the supervisory authorities expect timely and careful preparation for all eventualities and scenarios," a Commerzbank spokesman said.

"A meticulous effort to minimise risk does not necessarily mean that we expect these scenarios to come to pass," he added.

Deutsche Bank's co-chief executive Anshu Jain underscored the financial market's nervousness in remarks late on Tuesday.

"The stakes are high," Jain told a conference of German business leaders in Berlin.

"Risks remain. A systemic event would have significant and long-lasting consequences - not just for Europe, but for the whole world," he said.

Greece is returning to the polls after political parties were unable to form a government following elections in early May.

The last opinion polls published before a pre-election blackout showed Greece's leftist anti-bailout party SYRIZA running neck-and-neck with the conservative New Democracy party, which wants only minor adjustments to the bailout. (Reporting by Philipp Halstrick and Kathrin Jones, Lionel Laurent and Christian Plumb; Writing by Jonathan Gould; Editing by Mark Potter and Greg Mahlich)