French bank Credit Agricole is reviving plans to simplify its ownership structure with a scheme to inject capital into the listed entity through the sale of a cross-shareholding back to the co-operative parent.
Shares in the bank, which has its roots in the French farming community, climbed by as much as 6 percent after the news and were up 4.9 percent at 1154 GMT.
The group said it was considering selling the listed entity’s 25 percent stake in the network of 39 regional banks — or “caisses” — back to the caisses themselves, consolidating control with the caisses, but providing capital at the listed group level to help finance dividends for minority investors.
“This project… would reinforce the financial flexibility of Credit Agricole SA,” the bank said in a statement.
The move revives a plan that foundered last year on objections from the European Central Bank, disappointing minority shareholders, who had hoped for a dividend windfall and an rise in the share price as a simpler structure would make it easier to value.
Analysts put the cash value of the 25 percent stake at 17 billion euros ($18.5 billion).
The cross-holdings tying the bank together have created tensions between the listed bank and the mutual lenders that control it, and some say the structure looks opaque under the tightened regulatory scrutiny of the industry introduced after the financial crisis.
The network of 39 caisses make up the backbone of the Credit Agricole group. Through a holding company, they own a 56 percent stake in the listed group, which in turn owns a 25 percent stake in the caisses.
In November the bank named cereal farmer and long-serving executive Dominique Lefebvre in a new over-arching group chairmanship role to unify the bank.
A strategy update is planned for investors on March 9.
A change along the lines Credit Agricole is considering would give the group a structure closer to that of rival BPCE and its listed partner Natixis.