Dexia could be split up: report

PARIS (Reuters) - Franco-Belgian financial services group Dexia (DEXI.BR) could be split up, with the French part joining state-controlled Banque Postale, Les Echos newspaper reported on Friday.

Belgian daily La Libre Belgique had reported on Wednesday that Dexia DEI.PA could enter a partnership with the French postal bank to help it access fresh financing.

Dexia could use the savings held by Banque Postale to issue loans to the municipalities and other public bodies it serves.

Les Echos said the Caisse des Depots, which holds 17 percent of Dexia, was in favor of splitting Dexia up and attaching the French part - the former Credit Local de France - to La Banque Postale. This was one scenario being considered for Dexia, the Belgian daily said.

Dexia received a 6.4 billion-euro ($8.95 billion) public bailout in September and last month posted a third-quarter net loss of 1.54 billion euros.

La Banque Postale meanwhile wants to buy Banque Palatine from French mutual bank Groupe Caisse d'Epargne to boost its business providing credit for companies, Les Echos added.

La Banque Postale would be prepared to pay a high price and take on debt to finance the purchase, Les Echos reported, quoting a source close to the French postal bank.

The Groupe Caisse d'Epargne hoped to garner 1.1 billion euros from the sale, the newspaper added.

La Tribune had reported on Saturday that Groupe Caisse d'Epargne was considering parting with Banque Palatine after its planned merger with Banque Populaire.

La Banque Postale declined to comment on Friday. The Groupe Caisse d'Epargne had no immediate comment.

(Reporting by James Regan and Matthieu Protard; Editing by Victoria Main)