Paris - Badly stung by the financial crisis, the French mutual banking group Banque Populaire said Thursday it had lost 468 million euros (598 million dollars) in 2008, its first loss in decades.

Turnover for Banque Populaire was down 17.8 per cent over 2007, to 1.1 billion euros, the bank said in a press statement.

The bank said the primary reason for the loss was the performance of its investment banking subsidiary Natixis, which announced earlier Thursday that it had lost 2.8 billion euros last year due to its exposure in the US subprime crisis.

Natixis is jointly owned by Banque Populaire and another French bank, Caisses d'Epargne, which was set to announce 2008 results later Thursday. Analysts have said that Caisses d'Epargne could announce losses for 2008 of 2 billion euros.

Because of the weakness in the banking sector and the losses suffered by Natixis, President Nicolas Sarkozy has worked to force a merger between Banque Populaire and Caisses d'Epargne, which could be announced later on Thursday.

The move has drawn broad criticism because a close adviser to Sarkozy, Francois Perol, was to head the new bank.

In addition, the state was set to take a 20 per cent share in the new group, which will become France's second largest with some 120,000 employees, 8,000 branch offices in France and 36 million customers. (dpa)