French banking shares in green after stress test success

01:01, July 27, 2010      

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The index of France's banking sector on the stock market surged Monday after European banks' stress test results bolstered investors' confidence in the country's financial institutions.

The banking sector was the French stock market's star performer as it soared 2.36 percent, according to the sectorial index.

It was mainly pulled by the Societe Generale bank, whose shares grew 2.75 percent.

Credit Agricole and PNB Paribas rose 1.0 percent and 0.70 percent respectively, while the main index CAC 40 remained in red after inching down 0.13 percent to 3,602 points at 1204 GMT.

France's four leading banks successfully experienced the latest European Union (EU) stress test and showed strong performance in coping with the financial turmoil. This is likely to lure back the confidence of stay-away investors to back the country's market.

The tested banks were BNP Paribas, Societe Generale, Credit Agricole and BPCE, the parent of investment bank Natixis.

This success means that French banks can finance economy, households and companies and markets' distrust should now disappear, given the tested transparency, French Economy Minister Cristine Lagarde said.

The Committee of European Banking Supervisors with national supervisory authorities recently tested 91 banks in some 20 EU states, totaling 65 percent of the banking assets in the EU, to assess their ability to cope with the financial crisis. The stress tests flunked only seven of the 91 participating lenders.

Source: Xinhua


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