Jean Laurent, the chief executive officer of Crédit Agricole, gave the strongest indication yet that a merger with Crédit Lyonnais would take place when he delivered first-half results that saw profits at the French banking giant fall 29%.

Laurent said: "We believe that a rapprochement with Crédit Lyonnais makes sense. But the game is very open and many scenarios are still possible including maintaining the status quo. As things stand nothing is settled."