PARIS - BNP Paribas confirmed it was studying a bid for scandal-hit rival Societe Generale that could bring the country's two biggest banks together, while France told foreign predators to stay away.

'We are studying it because all Europe's banks are studying it,' said a spokesman for BNP on Thursday .

SocGen declined comment, but the weakened bank's shares closed up 1.7 per cent at 83.20 euros, putting its stock market value at 39 billion euros (S$82 billion), about two-thirds that of BNP, whose stock closed down 1.5 per cent at 65.83 euros.

The affair was still unrolling on Thursday after police raided a Paris flat to seize Kerviel's computer, and as a clutch of investigations into how and why the bank's systems failed to prevent the debacle got under way.

GSD Gestion fund manager Jacques Gautier said a tie-up would be good for shareholders in both banks.

'In terms of the French retail banking network, it will double BNP's capacity. There would also be cost cuts as the two banks overlap in many areas,' he said.

Meanwhile, France was heading for a clash with its European Union partners over whether foreign bidders should be allowed a free hand.

'When we are in very sensitive sectors, and the financial sector is one, because it's structural for the economy, it's normal that the public powers look at how and whose hands the French money is in,' said France's minister for European affairs, Mr Jean-Pierre Jouyet.

His comments reinforced a view from French Prime Minister Francois Fillon, who said earlier this week 'the government is determined that Societe Generale remains a great French bank'.

Mr Jean-Claude Juncker, chairman of the Eurogroup set of euro-zone ministers, said on Thursday a bid by a foreign player would not be surprising.

'If someone coming from abroad wanted to do good things with SocGen ... why would that bother me?,' Mr Juncker, who is also the prime minister of Luxembourg, said on Europe 1 radio. -- REUTERS