Mumbai: BNP Paribas, France's biggest listed bank, has abandoned plans to acquire scandal-hit rival Societe Generale.

"Given the persistent rumors, BNP Paribas clarifies that it has ceased to consider a potential tie-up with Societe Generale," BNP said in a statement.

Societe Generale revealed $7.1 billion in losses in January, allegedly incurred while cleaning up operations of alleged ''rogue'' trader Jerome Kerviel.

Societe Generale said in January that trader Jerome Kerviel had amassed 50 billion euros in positions in stock index futures backed by fake hedges and false documents.

BNP also cited difficulties in a merger between the two banks, with the overlap in corporate and investment banking operations.

BNP's statement that a takeover of Societe Generale would not create shareholder value in the current market conditions has left SocGen investors in the lurch.

BNP Paribas had made a failed bid to acquire Societe Generale way back in 1999. BNP had made the bid to block a friendly merger between Societe Generale and Paribas. In the end, BNP won Paribas but failed to buy Societe Generale.

BNP Paribas has, meanwhile, announced a new asset-management joint venture with the Saudi Investment Bank. BNP's asset management division will take a 25 per cent stake in the Saudi bank's asset management business, which has some 1.4 billion euros ($2.2 billion), in assets under management.

A BNP Paribas-Societe Generale combine would have overtaken Banco Santander SA and UniCredit SpA as the second-largest bank in Europe by market value, with operations stretching from Honolulu to Moscow.