Crédit Lyonnais (French: [k?edi lj?n?]) is a historic French bank. In the early 1990s it was the largest French bank, majority state-owned at that point. Crédit Lyonnais was the subject of poor management during that period which almost led to its bankruptcy in 1993. It was acquired by former rival Crédit Agricole in 2003 (see LCL S.A.).
Video Crédit Lyonnais
History
Founded in 1863 in Lyon by Henri Germain, Crédit Lyonnais was the biggest bank in the world by 1900. It was nationalised in 1945, as was most of the banking sector in France after the war.
Following a change of leadership and frantic expansion starting in 1988, the bank was the subject of numerous financial scandals, contributing to a huge debt of around 150 billion French francs (nearly EUR23 billion). This was caused by directors exaggerating investments and by problems with the bank's subsidiary companies.
Crédit Lyonnais became the leading lender to Hollywood studios in the 1980s. Clients included independent film studios Castle Rock Entertainment, Weintraub Entertainment Group, Nelson Entertainment, Vestron Pictures, and Carolco Pictures. Many of these companies developed financial difficulties. It also financed Giancarlo Parretti's takeover of Metro-Goldwyn-Mayer in 1990 for $1.25 billion. However, Paretti started looting the company, fired most of the accounting staff, appointed his 21-year-old daughter to a senior financial post, and used company money to buy presents for several girlfriends. By June 1991, CL had had enough: under the terms of an April agreement that gave it control of Parreti's MGM stock, it fired Parretti and began a lawsuit against him. However, CL soon faced intense scrutiny for its dealings with Parretti. Overall, CL lost $5 billion from its Hollywood deals.
The bank avoided financial disaster by moving its troubled debts and liabilities into a new state-owned company, Consortium de Réalisation (CDR). The creation of the CDR was highly controversial, as many did not believe that the French government should have bailed out the bank. The CDR notably agreed to pay US$525 million to the California Department of Insurance in order to head off a lawsuit over the Executive Life insurance scandal. The CDR also ended up with the various film libraries from now defunct film production companies that defaulted on their loans. The library was known as the Epic film library. The Loeb & Loeb law firm spent 4 years determining the full extent of the film assets. In late 1997, PolyGram Filmed Entertainment out bid Disney, Metro-Goldwyn-Mayer, Live Entertainment and several other companies, for the Epic library at $225 million.
To allow the bailout, the European Commission imposed severe limitations, principally on the bank's international activities, and the bank was forced to sell many entities in the following years.
On May 5, 1996 a major fire destroyed much of Crédit Lyonnais' Paris headquarters. The fire began in the main trading room of the bank and was one of the worst fires to damage a Paris building in 25 years. It burned for over 12 hours, destroying two-thirds of the building, along with crucial bank archives and computer data.
In 1998, Crédit Lyonnais sold Crédit Lyonnais (Austria) to the Anglo Irish Bank.
Crédit Lyonnais was fully privatized in 1999. In 2003 BNP Paribas built a position in the capital of the bank. However, in 2003, Crédit Agricole bought it and reorganised its operations:
- The investment banking business merged with Crédit Agricole Indosuez; the new entity took the name Calyon.
- The French retail banking network remained separate. In 2005 it was renamed LCL in order to avoid negative references to its troubled recent history. It is owned by, but competes with, the existing French retail network of Crédit Agricole.
Maps Crédit Lyonnais
Recent controversy
In 2001, Denis Robert and Ernest Backes book, Revelation, showed that Crédit Lyonnais was one of the many banks to hold unpublished accounts in Clearstream, a Luxembourg-based transaction clearing company, which has been accused by the authors of being a huge international money-laundering machine.
In 2005 the CDR had to pay back EUR135 million to the creditors of Bernard Tapie, the controversial billionaire, after a scandal concerning the sale of Adidas.
Sponsorship
Crédit Lyonnais sponsors the Tour de France, with its corporate brand on the sides of the yellow jersey (for the leader of the general classification in the Tour de France).
See also
- Le Crédit Lyonnais
References
External links
- Crédit Lyonnais bank profile with list of branches ATMs locations, contacts details and agencies SWIFT codes
- David McClintick, Anne Faircloth. "How an Italian thug looted MGM, brought Credit Lyonnais to its knees, and made the Pope cry". Archived from the original on 2009-11-18.
Source of article : Wikipedia
0 Comments