French bank Caisse d'Epargne has announced that it lost £470m in a "trading incident" last week.

The cooperative bank said the loss occurred in equity derivatives trading for its own account and was triggered by the market turmoil in the first week of October.

It said it had sanctioned those behind the loss and informed regulators.

"Because of the extreme volatility in the markets and the stock market crash of the week of October 6, the Caisse d'Epargne group underwent a major incident in the derivatives market," a statement said.

"The necessary steps to close this position and end this activity were taken."

A company official, speaking on condition of anonymity, told news agency AFP that a finance director from the group had been sacked.

Six members of the team that made the losing trades had been disciplined, the official added.

The firm, which is one of France's biggest building societies, stressed that the bad investment was not made with customers' savings.

The bank said the loss will not affect its financial solidity because it has capital of more than £15.6bn and significant liquidity.

The bank was last week involved in merger talks with Banque Populaire.