French bank Credit Agricole said it had no plans for talks on a merger with rival Societe Generale and insurer Groupama, after Le Monde newspaper reported that Agricole was studying such a deal.

Credit Agricole says it has not engaged Societe Generale and Groupama in any talks and has no intention of doing so, an Agricole spokeswoman told Reuters.

Le Monde, citing its own sources, said Agricole Chairman Rene Carron and Chief Executive Georges Pauget were studying this possible three-way merger in the greatest secrecy.

Le Monde said Agricole would initially approach Groupama over a merger. Groupama and Agricole would then together seek a merger with SocGen, in which Groupama already owns a small stake.

However, the French newspaper added that Agricole's own regional retail banks -- which control the majority of Agricole's capital -- were against any such transaction.

SocGen shares initially rose after Le Monde published its report but then pared those gains following Agricole's response.

SocGen was up 0.4 percent at 48.42 euros in early afternoon trade, giving the bank a market capitalization of roughly 29 billion euros ($43.6 billion).

Credit Agricole, which has France's biggest retail bank network, was down 1.5 percent at 14.45 euros to give Agricole a market capitalization of roughly 34 billion euros.

BNP Paribas, France's biggest bank by market capitalization, was down 1.2 percent at 55.57 euros. At that price, BNP has a stock market value of around 66 billion euros.


The shares of both Agricole and SocGen have lagged BNP Paribas over the last year, a period during which BNP has emerged as one of the top European banks least affected by the global financial crisis.

BNP shares are up around 90 percent since the start of 2009, while SocGen has risen by around 40 percent and Agricole by about 80 percent.

Agricole and SocGen already have joint ventures in fund management and via their Newedge brokerage and there has already been speculation that the two banks might at some point envisage a full merger.

SocGen has long been seen as a possible takeover target since it narrowly escaped a bid from cross-town rival BNP in 1999.

SocGen's 4.9 billion euro trading loss in January 2008 further weakened the bank, although it has since recovered from the incident, which it blamed on unauthorized deals carried out by junior trader Jerome Kerviel.

The Kerviel debacle briefly reignited BNP Paribas' interest in SocGen although BNP eventually decided against pursuing its former quarry.

SocGen, a 145-year old bank, has long defended its independence.

SocGen said it had not been approached over a tie-up with Agricole and Groupama and added that any such deal did not fit in with the company's strategy.

Analysts said that while a full-blown merger between Agricole and SocGen could make sense given the existing joint ventures between the two companies, any transaction would be hard to execute.

Acquiring control of SocGen would boost Agricole's Calyon investment banking arm but Agricole has recently been cutting back on its investment banking business after a spate of losses at Calyon.

The deal seems difficult --the Credit Agricole regional banks are likely opposed to such deal, said one Paris-based trader.

(additional reporting by Blaise Robinson)

($1=.6650 Euro)

(Editing by David Cowell)