The Confédération Nationale du Crédit Mutuel said it is ending discussions with Crédit Mutuel Arkéa SACC over the latter's plans to split from the banking group.
"The discussions are closed," a Confédération spokeswoman told S&P Global Market Intelligence. She said Arkéa had not provided any proposals for the split and had not responded to a set of measures put forward by the Confédération on June 19, 2018. Thus the Conféderation considered that the case was closed, she said.
Arkéa has been in a long-running battle with parent Crédit Mutuel Group after it converted its governing body, the Confédération Nationale du Crédit Mutuel, into a cooperative and merged it with the Caisse Centrale du Crédit Mutuel — responsible for members' liquidity needs — at the behest of the European Central Bank. Arkéa said the changes threaten its independence, and its regional savings banks voted in favor of the group's independence.
In June 2018, Crédit Mutuel said a split would result in Arkéa having to pay its parent compensation. Arkéa would also have to make binding job commitments to its own banks, which are in Brittany, western France, and in the country's southwest.
Following a Jan. 9 board meeting, the Confédération said the lack of a specific plan by Arkéa to split from its parent meant there were "too many uncertainties" weighing on the group's customers and on the future of the Crédit Mutuel brand in Brittany and in the southwest.
Arkéa's management would need to submit a proposal taking into account the demands of the parent group if it wants to continue its bid to split from the group.
Arkéa said it was "surprised" at the Confédération's position, and said it would set out its proposals to split from the group once local regional banks voted on the separation plan. The regional banks voted massively in favor of breaking away from the parent group in April 2018, with 94.5% in favor of the bank's independence.
French authorities are against the split and have said they would not change banking laws to allow Arkéa to become independent.