Daniel Bouton, the chairman of Société Générale, is exploring a tie-up with the French post office as he seeks to block takeover bids after the rogue trader scandal that rocked his bank, it emerged yesterday.

However, news of talks with La Banque Postale, the banking division of the state-owned postal service, met with scepticism from analysts and French government sources, who saw little chance of a deal.

The initiative comes as Mr Bouton struggles to save his job and his bank's independence after Jérôme Kerviel, a junior trader, lost €4.9 billion (£3.7billion) after making unauthorised bets on European futures markets.

Mr Bouton's fate could be sealed this week when Jean-Martin Folz, the head of a committee set up to investigate the scandal, is expected to give preliminary findings. A French government source said that Mr Folz could precipitate Mr Bouton's resignation if he blames the losses on lax procedures and mistakes at SocGen.

Rogue traders' profit boosted SocGen bonuses

Jerome Kerviel's lawyer claims executives at the French bank benefited from the successful investments of the rogue trader

• SocGen rights issue will be at a 39% discount

• SocGen trader remanded in custody after court hearing

Multimedia

• Full coverage of the SocGen scandal

• Blog: Charles Bremner on SocGen

• Video: Patrick Hosking on the impact of fraud

BACKGROUND

• Who Knew What and When?

• SocGen director probed over €100m share sale

• Ex-SocGen risk auditor calls systems a sham

Related Links

• SocGen rights issue at 39% discount

• Bouton stays as board ignores Sarkozy

Les Echos, the French financial daily, said that the hunt for SocGen's next chairman had started already amid reports that SocGen was investigating Mr Kerviel's dealings last year.

Mr Bouton is being portrayed in French government circles as an obstacle to a merger with BNP Paribas, another French bank, which is run by Michel Pebereau, his long-time rival.

With BNP Paribas considering a bid for SocGen, ministers are keen to push through a friendly merger to create a French banking champion. Sources at SocGen, however, say that Mr Bouton was determined “not to give the keys of the bank to BNP Paribas”.

He is understood to have held discussions with Patrick Werner, chairman of La Banque Postale, over an agreement that would involve SocGen taking a stake in the state-owned bank. Mr Werner and Mr Bouton are believed to be on good terms.

The deal would enable La Banque Postale to obtain private finance and give SocGen access to France's 17,000 post offices. However, French government sources said that there were no plans for a partial privatisation of the post office.

Analysts also poured cold water on the talks, saying that SocGen lacked the funds to buy post office shares even if they were on sale. A share exchange was equally improbable, since it would involve a nationalisation of SocGen, they said.

There was some good news for Mr Bouton as aides said that his bank was confident that its €5.5 billion capital increase, to be offered this week, would be fully subscribed. SocGen's full-year results are released on Thursday.

— Christian Noyer, the Bank of France Governor, said that the SocGen scandal probably was due to an accumulation of “small mistakes” in internal controls. He rejected the idea that regulations or the company's culture were at fault.

“It clearly shows the need to have more systematic and regular controls of gross positions, and even more rigorous controls on the resilience of computer systems to fraudulent penetration.”

National champion?

— France could follow China and oil-rich Gulf states by setting up a sovereign wealth fund, according to Christine Lagarde, the French Finance Minister.

— She said that she was considering a fund run by the Caisse des Dépôts et Consignations (CDC), the state-owned administrator of savings and pension funds, which already invests in French industry.

— “The sovereign fund for the CDC is a proposal I find extremely seductive and which I am thinking about,” she said. “The CDC as a sovereign fund, including the assets that the French State owns today, is perfectly possible and interesting.”

— The idea was proposed in a report on how to improve French growth commissioned by President Sarkozy and submitted last month by the former presidential adviser Jacques Attali.

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