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Widening the comfort zone

Like an old pair of slippers, retail banking is the division Société Générale knows it can rely on for a bit of comfort. When times are bad - as they have been lately - retail revenues, which comprise 60% of the group's total, provide a welcome buffer. "For French banks in general and SocGen in particular, retail banking really is a cash cow," says Guillaume Tiberghien, an analyst at Fox-Pitt, Kelton.

Société Générale has been more successful than BNP Paribas in attracting the best types of customers - graduates and high-net-worth clients. "It has the best customer base in French retail banking," says Eric Hazart, an analyst at Exane in Paris. "It has a lot of young people and wealthy customers with a high savings capacity and the best ROE at 18.7%."

Moreover, although BNP Paribas has lost market share recently, Société Générale's seems to be increasing. Last year French mortgage lending grew by 10%, for example, and sight deposits rose 5.2%. But the prospects for further growth are limited in France, which is why BNP Paribas's Michel Pébéreau hankered after Crédit Lyonnais for so long.

His solution was to expand to the west coast of the US.

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