Credit Lyonnais gave at the office. Twice.

This past year was an annus horribilis for France's Credit Lyonnais, the friendliest bank to Hollywood. Maybe this explains why no French jokes are heard in Tinseltown. Nevertheless, the rumor mill is doing Credit Lyonnais in. especially in Paris.

To begin with, Credit Lyonnais had to fix MGM. repair Carolco and fend off several lawsuits from former film-TV company owners that Credit Lyonnais financed. Recently it has been reported that Credit Lyonnais [ell into the claws of a few U.S. government agency investigators, and it is being used as a pin ball by some French politicians. Previously. Credit Lyonnais bankrolled some seven entertainment companies that subsequently went bankrupt.

A Credit Lyonnais representative complained that the industry isn't giving enough credit to the bank for its willingness to be involved in film company financing, and he cites the MGM-Carolco deal as an example of positive thinking by the bank.

But, Credit Lyonnais makes it difficult to produce an accurate report on its activities. We began making preparations for this article in mid November 1992, but it was only late last month that we were able to receive some information. In Paris, Francois Rich. Credit Lyonnais' public relation man, said from the outset that the only man authorized to speak to M/Video Age was Guy Dufour, Credit Lyonnais' director of international activities. The Paris-based Dufour "inherited" the entertainment business division [rom its Credit Lyonnais Bank Netherland (CLBN) subholding - following the resignation of Jean Jacques Brutschi, chairman of CLBN in Rotterdam.

In early December, when we reached Dufour, he said that he was leaving for Los Angeles, and preferred to be contacted upon his return. However, in early January 1993, we were told by his office that there wasn't going to be any reply. This until late last month when we received an unsolicited call from Fred Spar, an independent public relations man representing Credit Lyonnais from New York, who was willing to cooperate. at least to a degree.

Spar emphasized the bank's determination to continue involvement in the entertainment business where it will be looking for "quality opportunities." He said that Credit Lyonnis is determined to nurse MGM back into a healthy position, because the bank considers it an eventual viable source of earnings. According to Spar, Credit Lyonnais has five years to make a decision about MGM. It has. under the law. two years plus extensions of three one-year periods to rid itself of MGM if it so chooses.

Spar considered it standard procedure that nowhere in Credit Lyonnais' 1991 Annual Report. or in the first hall of its 1992 report. did Credit Lyonnajs show its financial exposure to the film-TV industry, which is now reaching an estimated $2 billion. The only reference in the interim report stated: "...the provision takes into account the poor quality loans made between 1985 and 1990 by the Dutch subsidiary to the cinema industry. loans which have continued to deteriorate since being transferred to the head office."

In addition, the statement said that given the size of the provision, the total net income amounted to FF 681 million, a 62 per cent drop compared to the same period in 1991. Nevertheless, total banking net profit for 1991 still amounted to a hefty FF 4,078 million ($800 million) with an equivalent of $630 million as its share. In the first half of 1992, the bank's net profit share amounted to S23 million, a 92 per cent drop from the same period the previous year.

However, considering that total banking income reached FF 24.4 billion (an increase of 15.8 per cent over the first six months of 1991) and that total 1992 group assets reached FF 1,608 billion (about $321 billion and a one per cent increase over 1991) and loans of FF 778 billion, Credit Lyonnais, at worst, can be considered healthy and prosperous.

Partly unexplained is the reason why banking decisions for the entertainment industry were left to the Rotterdam office when "Credit Lyonnais USA has continued to post a good performance." The official explanation is that "historical reasons" dictated such a decision. Since the Dutch subsidiary (formerly Slavenburg Bank), which was acquired in the early '80%, was involved in the entertainment business, Paris left the entertainment business in Rotterdam. Only recently Credit Lyonnais' seven-member executive committee decided to bring responsibility for the entertainment field to Paris.

It is now speculated that because of the aforementioned fracas, Jean-Yues Harborer, the Credit Lyonnais Chairman, a Socialist, is risking to be replaced. The French government owns 54-3 per cent of Credit Lyonnais directly, while it indirectly controls another large slice.