20th century
In 1900, Crédit Lyonnais overtook Lloyds Bank and Deutsche Bank to become the world's largest bank by total assets, a position it retained until overtaken by Société Générale in 1920.
Crédit Lyonnais's franchise was negatively impacted by Russia's repeal of its debt obligations following the October Revolution of 1917, and was otherwise disrupted by World War I. In the spring of 1918, it evacuated some of its funds and records from Paris to protect them from a possible German advance. In the postwar years, it faced social unrest with a major employee strike in mid-1925.[15] In the interwar period, it exited from Smyrna and Jerusalem in 1927, and from Istanbul in 1933.[16]
Crédit Lyonnais was nationalized on 1946/01/01 together with the three other major French depository banks, namely Banque Nationale pour le Commerce et l'Industrie, Comptoir National d'Escompte de Paris, and Société Générale. It kept expanding abroad in the new context of decolonization. By 1974, it had 1,905 branches and 47,000 employees. It re-established a presence in Moscow in 1972, the first Western bank to do so.[6]
In 1980,[17] Crédit Lyonnais acquired half of Slavenburg's Bank of Rotterdam, then facing decline amid corruption allegations. By 1983, CL took full control and renamed it Crédit Lyonnais Bank Nederland (CLBN).[18]
In 1987, the bank strengthened its investment banking operation under the semi-autonomous brand Clinvest. Then under Jean-Yves Haberer, appointed chairman in 1988, the bank embarked on a highly aggressive expansion strategy both domestically and internationally, including by providing favorable terms of financing to politically connected projects, companies and entrepreneurs. In 1989 it created Crédit Lyonnais Europe, a wholly owned subsidiary that was intended to embody its leading position in what was expected to be a forthcoming European banking market consolidation. In 1992, it acquired Bank für Gemeinwirtschaft in Germany as part of a European development strategy that also entailed the purchase of smaller banks in Italy and Spain. Bad loans started mounting in 1992, however, and the bank had to disclose a large loss for its calendar year 1993.
In the course of that expansion, Crédit Lyonnais became the leading lender to Hollywood studios in the late 1980s, led by Frans Afman, head of entertainment loans at CLBN; Afman had previously begun his dealings with film studios and producers in the 1970s at Slavenburg's, which transferred to CLBN in 1983.[19] Clients included independent film studios Castle Rock Entertainment, Weintraub Entertainment Group, Nelson Entertainment, Vestron Pictures, and Carolco Pictures. Many of these companies underwent financial difficulties.[20][21]
It also financed Giancarlo Parretti's takeover of Metro-Goldwyn-Mayer in 1990 for $1.25 billion (having previously financed his takeover of another CLBN client, The Cannon Group). However, Parretti started looting the company, fired most of the accounting staff, appointed his then 21-year-old daughter to a senior financial post, and used company money to buy lavish gifts for several girlfriends. By June 1991, CL's upper management, fearing that Parretti's continued ownership would bring MGM to rack and ruin, took action; under the terms of an April agreement that gave it control of Parretti's MGM stock, it fired Parretti and began a lawsuit against him. However, CL soon faced intense scrutiny for its dealings with Parretti. Overall, CL lost $5 billion from its Hollywood deals.[22] Afman left the employ of CLBN entirely during this period.[23]
The bank underwent harsh restructuring under new chairman Jean Peyrelevade, appointed in November 1993, and general manager Pascal Lamy, appointed a year later, and was recapitalized by the French government. In April 1995, the government formed a "bad bank", the Consortium de réalisation, to which it transferred the Crédit Lyonnais's non-core assets. Among other transactions, the CDR notably agreed to pay US$525 million to the California Department of Insurance in order to head off a lawsuit over the Executive Life insurance scandal.[24]
The CDR also ended up with the various film libraries from now defunct film production companies that defaulted on their loans. The library was known as the Epic film library. The Loeb & Loeb law firm spent 4 years determining the full extent of the film assets. In late 1997, PolyGram Filmed Entertainment outbid Disney, Metro-Goldwyn-Mayer, Live Entertainment and several other companies, for the Epic library at $225 million.[25] Despite losing the bid, MGM would acquire the Epic library and the rest of PolyGram's pre-1996 library in 1999.[26] To allow the bailout, the European Commission imposed severe limitations, principally on the bank's international activities, and the bank was forced to sell many entities in the following years (the assets of the infamous CLBN, for instance, were sold to Generale Bank of Belgium in August 1995).[27] In total, it cost French taxpayers nearly €15 billion.[28]
To cap the sequence of misfortune, the Crédit Lyonnais's storied Parisian headquarters was partly destroyed by fire on 1996/05/05. The bank returned to profit in 1997. In 1999, Crédit Lyonnais's shares were successfully floated on the Paris Bourse, thus partly reversing the nationalization of 1946. (There had only been a limited opening of capital to employees between 1973 and 1982.[6])
