BNP Paribas SA (BNP), Europe’s third-largest bank by value, plans to buy Belgium’s 25 percent stake in its local consumer-banking unit for 3.25 billion euros ($4.37 billion) as the country seeks to cut public debt.
“It is a tangible sign that banks with comfortable reserves can make acquisitions,” said Romain Burnand, who helps manage 1.8 billion euros at Moneta Asset Management in Paris and owns shares in BNP. “Since the 2008 crisis, there have been lots of banking assets for sale and few buyers. Now we’re maybe at the very start of a new trend.”
BNP’s all-cash offer to buy Belgium’s minority stake in its Brussels-based unit is Europe’s largest banking deal, excluding taxpayer-funded bailouts, since ING Groep NV (INGA) completed the sale of its U.S. online bank to Capital One Financial Corp. (COF) for $9.1 billion in February 2012, data compiled by Bloomberg show.
BNP Paribas, which took control of Belgium’s largest bank by assets in 2009, sees the deal increasing 2013 per-share net income by about 3 percent, the bank said yesterday in a joint statement with the Belgian government. Belgium will get a capital gain of about 900 million euros.
“The objectives set by the government when the Belgian state initially invested were fully achieved,” Belgian Prime Minister Elio di Rupo and Finance Minister Koen Geens said in the statement. “The bank has met its commitments despite a challenging environment.”
Belgium, which also spent billions of euros to help rescue Dexia SA (DEXB), is selling the stake in BNP Paribas Fortis SA (FBAVP) to reduce public debt to less than 100 percent of its economic output by year-end, as agreed on with the European Commission.
Belgium’s gross public debt was projected to increase to 100.4 percent of gross domestic product this year from 99.8 percent last year, according to the latest forecasts from the European Commission.
The Belgian government acquired Fortis, the country’s largest bank, for 9.4 billion euros during a 2008 bailout and subsequently sold a 75 percent stake to BNP Paribas in an all-stock transaction giving Belgium 11.6 percent of France’s biggest bank. The Belgian stake has since been diluted to 10.3 percent, according to data compiled by Bloomberg.
BNP Paribas rose as much as 3 percent in Paris trading, and was up 2.2 percent to 54.05 euros by 2 p.m., giving the bank a market value of 67.2 billion euros. The shares have risen 27 percent this year, outpacing the 15 percent gain of the Bloomberg Europe Banks and Financial Services Index.
BNP Paribas said the deal will have a negative impact of about 50 basis points, or half a percentage point, on its common equity Tier 1 Basel III ratio. That ratio was at 10.8 percent at the end of September, up 40 basis points from June, the Paris-based bank said last month.
Pretax profit at BNP Paribas’ Belgian retail-banking business rose 2.2 percent to 187 million euros in the third quarter, the bank said last month. BNP Paribas’s activities in Belgium also include corporate- and investment-banking.
To contact the reporters on this story: Fabio Benedetti-Valentini in Paris at firstname.lastname@example.org; John Martens in Brussels at email@example.com; Louisa Fahy in Washington at firstname.lastname@example.org