Credit Lyonnais's Open House: A Rare Opportunity for Transparency

Tonight, the staff of France's Credit Lyonnais SA are bracing themselves for an unusual gathering of customers at one of the bank's 2,200 branches. The state-owned bank has invited customers to drop by after hours to express their concerns and ask questions about the bank's recent financial struggles. The bank's 6 million customers are being encouraged to pose the same questions that Credit Lyonnais bankers typically ask clients in financial difficulty, such as "How did you get so in debt?" and "Who does the accounting at your place?"

Key Takeaways:

• Credit Lyonnais is facing significant financial struggles, with losses totaling 11.4 billion francs over the past 18 months, and fears of customers being driven away.
• The bank has launched a public relations campaign to counter potential erosion in its depositor base, including a full-page advertisement in over 65 newspapers and an open house event tonight.
• Credit Lyonnais has been involved in several high-profile deals, including the Canary Wharf project, Eurotunnel, EuroDisney, and the takeover of Hollywood studio Metro-Goldwyn-Mayer Pictures Inc.
• The new chairman, Jean Peyrelevade, blames the previous management for the fiasco and has sought government rescue funds, with 5 billion francs already provided.
• The bank's open house event is an attempt to be as honest as possible with customers and persuade the government to cover its losses and keep it solvent.
• European businesses are generally behind their North American counterparts in paying attention to consumer service and satisfaction, making Credit Lyonnais's open house a significant move in the industry.
• The bank's open house has been seen as a good idea by banking analyst Sarah Manton, who notes that it is not a desperate move, but rather a way to keep branches open and build customer trust.

Statistics:

• Credit Lyonnais has 6 million customers and is Europe's largest bank when measured by assets.
• The bank has made provisions for 70 billion francs in doubtful loans.
• The government has already provided 5 billion francs in rescue funds to the bank.
• The bank's losses over the past 18 months total 11.4 billion francs.
• Credit Lyonnais's half-year loss was 4.5 billion francs, following a full-year loss of 6.9 billion francs in 1993.
• The bank has 38,000 employees.

Sources:

• "Europe's biggest bank opens its doors to angry customers" by Madeleine Drohan.
• An article in over 65 newspapers, including the advertisement for Credit Lyonnais's open house.
• A report by Morgan Stanley's London office, citing banking analyst Sarah Manton.