Troubled Bank Signs an Agent : Hollywood: France’s Credit Lyonnais hires Creative Artists Agency as consultant.

French banking giant Credit Lyonnais and Hollywood’s Creative Artists Agency have aligned in a deal that gives them greater clout in the entertainment industry and enhanced opportunities to expand.

Credit Lyonnais, stung by problems in its entertainment lending, disclosed Thursday that it has hired the powerful talent agency as a consultant.

CAA will advise Credit Lyonnais on ways to clean up its troubled portfolio, but it will also explore new investment options for the bank, sources close to the deal said.

The agreement will allow CAA to consult on $3.2 billion in media-related loans, including those involving Metro-Goldwyn-Mayer, Carolco Pictures and related areas such as publishing, television and telecommunications.

Expansion-minded CAA, headed by Michael S. Ovitz, also gains access to the world’s seventh-largest bank, which should aid the company in business deals. The financial adviser role is not new to CAA. It brokered the sale of entertainment giant MCA Inc. to Japan’s Matsushita Electric Industrial Co. and consults with other large firms.

For Credit Lyonnais, the CAA alliance is a way to address a series of embarrassing entertainment loans. The bank was forced to take possession of MGM after owner Giancarlo Parretti defaulted, and smaller companies such as Carolco Pictures have required financial bailouts, leading to widespread criticism of the bank in France.

Sources close to Credit Lyonnais say the bank also sees the new partnership as a way to draw more talent to MGM, since CAA represents such stars as Tom Cruise, Kevin Costner and Barbra Streisand.

MGM has been trying--mostly without success--to put together some hit films to enhance its value. Because of its uncertain status, however, the studio has found it difficult to compete for top-quality projects and talent.

Credit Lyonnais took control of MGM last year. The bank is believed to be losing about $1 million a day, and has until 1997 to sell the studio under U.S. banking laws.

There has been speculation that political changes in France could result in a shake-up at the state-owned bank. French voters, angry at scandals and high unemployment, are expected to hand the conservative opposition a big majority of National Assembly seats in Sunday’s second round of runoff elections.

But a Credit Lyonnais spokesman said the bank is not anticipating major changes in its operations as a result of the election.

CAA is expected to concurrently search out new investment opportunities for Credit Lyonnais as it works to restructure its existing loans. Sources close to the deal said the cleanup process could take as long as a year.

While both sides declined further comment, talks are said to have progressed quickly. They heated up last week, when CAA’s Ovitz met with top Credit Lyonnais executives in Paris. The bank then sent representatives to CAA’s Beverly Hills headquarters Tuesday.

The final details were worked out Wednesday, sources said.