BNP Raising $800 Million From Sale of First Hawaiian Shares

  • French bank sees sale boosting capital by 0.1 percentage point
  • Sale is part of a process that started with IPO in August

BNP Paribas SA is raising about $800 million from the sale of a stake in First Hawaiian Inc., part of a plan for strengthening its capital buffers.

An affiliate of France’s biggest bank is selling 25 million First Hawaiian shares, representing 17.9% of the Honolulu-based lender, at $32 apiece, BNP Paribas said in a statement.

BNP Paribas estimates the sale will boost its common equity Tier 1 ratio -- a key measure of the assets it holds against losses -- by about 0.1 percentage point. The transaction is part of a process of First Hawaiian sales that started by taking the company public in August and which the French bank hopes will increase its core capital ratio by 0.4 percentage point.

BNP Paribas, one of the few large European banks to have been profitable every year over the past decade, continues to reinforce its capital to counter stiffer regulatory requirements intended to prevent a re-run of the global financial crisis. The French lender rose Wednesday in Paris trading.

“It’s a good operation” for BNP Paribas, said Arnaud Scarpaci, who helps manage 300 million euros ($324 million) at Montaigne Capital in Paris and owns no shares in the French bank. The Hawaiian consumer-banking unit has few links with BNP’s other activities and even after the sale, the French lender will maintain the bulk of its presence in the U.S., he said.

The offer price is 39 percent above last year’s initial listing price for First Hawaiian on the Nasdaq Global Select Market. The company closed little changed at $32.99 Tuesday, with a market value of $4.6 billion.

Top Performer

BNP Paribas rose as much as 1.9 percent, and was up 1.7 percent at 60.17 euros as of 12:25 p.m. in Paris, giving it a market value of 75 billion euros. The lender has risen 39 percent over the past year, making it one of the top five performers in the 44-member Stoxx 600 Banks Index.

The share sale is due to close on Feb. 6 and is being managed by Goldman Sachs Group Inc., Bank of America Corp., JPMorgan Chase & Co. as well as BNP Paribas itself.

As part of the offering, underwriters have 30 days to buy an additional 3.75 million First Hawaiian shares, the French bank said. After the sale, BNP Paribas will hold at least 62 percent of the Honolulu company, with the shares subject to a 90-day lock-up, it said.

BNP Paribas’s reduction of its stake in First Hawaiian may stretch beyond 2017 as it seeks “good windows” for disposals, Chief Operating Officer Philippe Bordenave said in October. “We’ll take time, we are not going to waste time either,” he said.

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