French Banks Drops on Tax Concern

French banks tumbled in Paris trading after the election victory of Francois Hollande raised concern that lenders will face higher taxes and may have to split off some of their riskier operations.

BNP Paribas SA (BNP) fell as much as 4.1 percent, Societe Generale SA (GLE) declined as much as 4.5 percent, while Credit Agricole SA slid as much as 5.4 percent.

Hollande yesterday defeated President Nicolas Sarkozy with about 51.7 percent of the vote, becoming the first Socialist to win the presidency in 17 years.

Hollande, who campaigned calling finance his “greatest adversary,” had pledged that he would force banks to split retail and “speculative” investment operations, impose a tax on all transactions and increase the levy on bank profits by 15 percent. The moves would come as the lenders struggle to shrink after writing down Greek bonds in history’s largest debt restructuring, Bloomberg reported.

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