(Corrects name of BNP CEO in paragraph 8 from Michel Pebereau, who is chairman)
PARIS The board of Societe Generale met on Wednesday to decide the fate of its chairman after rogue trading losses as fellow French bank BNP Paribas ducked questions on whether it would bid for its wounded rival.
The career of Daniel Bouton, the author of a blueprint on how to run a French company, hung by a thread as politicians pressed for top management changes over a scandal which has shaken France's image of itself as the sensible face of capitalism.
"Bank chief on the ejector seat," said daily Le Parisien in its front-page headline.
Bouton offered to resign as soon as the bank uncovered risky positions built up by rogue trader Jerome Kerviel. But the bank's 15-strong board has so far asked him to stay on.
An employee who represents staff interests on the bank's board said on Wednesday he would back Bouton to remain in charge. "When the boat is rocking, you don't throw the captain overboard," Philippe Pruvost told reporters.
What employees feared most was a takeover bid and a "loss of the bank's identity," he said.
On the eve of the board meeting, SocGen was thrown into further turmoil by market speculation of a takeover bid from cross-town rival BNP Paribas.
BNP Chief Executive Baudouin Prot, in an interview with Le Monde newspaper on Wednesday, declined to comment on such speculation.
BNP's CFO Phillipe Bordenave, presenting his bank's results, said he and his team had had "no time" to consider the fate of SocGen. "There are legal procedures under way which have attracted a huge amount of media attention so this is another reason why I dont want to comment on SocGen," he said.
SocGen shares rose 10.4 percent to 78.45 euros on Tuesday, spurred on by persistent rumours that France's biggest listed bank might launch a bid for the weakened SocGen.
On Wednesday, they were 0.34 percent up at 78.60 euros at 11:05 a.m.
BNP made a failed bid for SocGen in 1999. A person familiar with the matter said it had not ruled out bidding again for its rival.
Based on latest share prices, BNP Paribas has a market capitalisation of roughly 60 billion euros while SocGen's market capitalisation stands at 36 billion.
Anxious to reassure investors that its own finances are in better shape, BNP Paribas brought forward a partial statement of 2007 earnings showing fourth quarter net profit of a billion euros.
This was down 42 percent from the last quarter of 2006 but analysts called BNP's profits steady compared to declines seen in U.S. banks on the front line of the credit crisis.
BNP's Prot told Le Monde that nobody could say yet the global banking crisis was over.
In Switzerland, UBS announced $4 billion in new write-downs on Wednesday, bringing the total dent to its balance sheet from the sub-prime debacle to $18.4 billion.
On Tuesday, the French government warned foreign banks not to try to grab control of SocGen. "The government will not let Societe Generale be the object of hostile raids by other companies," Prime Minister Francois Fillon told parliament.
A French government spokesman said on Wednesday however, that the SocGen issue was not brought up at the weekly cabinet meeting.
SocGen's board faces a dilemma over whether to drop Bouton now or to avoid further upheaval that could help to deliver the bank to a predator.
"He must go, I think, but not during this difficult period which will last several weeks," Patrick Ollier, chairman of the French National Assembly's finance commission, said on Wednesday.
Bouton is best known outside banking as the main author of a 2002 report defining French standards on corporate governance.
His report recommended tightening controls in France after a series of accounting frauds in the United States, and pledged that French companies should drive international regulation.
SocGen said on January 24 it had uncovered massive unauthorised stock trading by one of its employees that led to the world's biggest rogue trading loss.
SocGen has been forced to launch a capital increase to raise 5.5 billion euros to cover the losses, as well as a 2.1 billion euro writedown resulting from the subprime crisis.
Kerviel, a 31-year old junior trader, was placed under investigation for breach of trust and other misdeeds on Monday, but judges threw out the stronger accusation of fraud.
Kerviel said in transcripts of interviews with police that his activities could not have gone undetected by SocGen.
SocGen's lawyer questioned Kerviel's account and his credibility and insisted the 31-year-old trader had acted alone.
(Editing by David Cowell/Rory Channing/Quentin Bryar)
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