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French banks face new foe as tobacconists offer accounts

By Lionel Laurent and Matthias Blamont

PARIS (Reuters) - The French will soon be able buy their cigarettes and do their banking at the same time with the launch of a stripped-down, cut price bank account by the country's huge network of tobacconists.

France's 27,000 "tabacs", whose distinctive red, diamond-shaped signs dot the nation's streets, will be out to win business from the likes of BNP Paribas and Societe Generale as established banks cut back their retail networks in a stagnating economy.

The Nickel bank account, which after initial tests is due to be expanded nationwide next year, will offer customers a debit card and a current account for 20 euros ($27.17). That compares with about 28 to 30 euros for the cheapest payment cards at BNP, SocGen and Credit Agricole.

Though Nickel clients will be charged fees for depositing and withdrawing money, the tabac association CBF still estimates the cost of having an account at less than 50 euros a year. The association says this is a third less than the cost of an account with Bank of France.

Nickel, co-founded by ex-SocGen communications chief Hugues Le Bret, also wants to lure people on the fringes of the system who may be unable to open a traditional bank account.

"With this account, we are bringing banking access to those who feel they've been forgotten, notably in rural areas, or simply shut out because of a mistake along the way," Pascal Montredon, head of the CFB network, told a press conference.

Nickel estimates that 1 percent of the French population does not have a bank account, while there are 2.5 million people who are classified as "overindebted" and 6 million who are unhappy with their current bank.

It also said that it wants to help to fight debt problems by not offering loans and is using the slogan "100 percent useful, zero percent toxic".

Nickel is being launched at a time when French retail banking, traditionally a cash cow thanks to lucrative fees and widespread appetite for conservative savings products such as life insurance, is taking a hit from the stagnant economy and competition from cheaper online competitors.

Lenders themselves are trying to come up with alternatives even as they close branches. BNP this year launched the online-only Hello Bank in Germany, Belgium, France and Italy to bring in customer deposits without a bricks-and-mortar branch network.

Consumer association UFC-Que Choisir, which has railed against the rising cost of bank charges, said that Nickel might help hard-pressed consumers to save money on bank fees.

BNP declined to comment. SocGen and the French Banking Federation did not respond to requests for comment.

(Editing by David Goodman)

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