BNP Paribas plans 4.3bn rights issue

FRENCH banking giant BNP Paribas is to raise &euro;4.3bn (&pound;4.1bn) as it joins the global rush by lenders to pay back state bailout money.<br /><br />The bank said the underwritten issue, at a discounted &euro;40 per share, would help it repay &euro;5.1bn in non-voting shares taken by the French government at the end of March, as well as a &euro;226m dividend.<br /><br />BNP, France&rsquo;s largest bank by market capitalisation, has found itself subject to restrictions on bonuses as part of its reliance on state aid, agreeing to cut its bonus pool to &euro;500m following pressure from France&rsquo;s president Nicolas Sarkozy.<br /><br />The bank&rsquo;s chief executive Baudouin Prot said BNP&rsquo;s fortunes had recovered sufficiently for it to cut ties with the state.<br /><br />&ldquo;State intervention to provide equity and liquidity, key in the midst of the financial crisis, has fully achieved its objectives,&rdquo; he said.<br /><br />&ldquo;Given the changing environment and the strong performance of BNP Paribas, this support is no longer required.&rdquo;<br /><br />But he declined to confirm that BNP Paribas was in talks with the Dutch government to buy the nationalised banking assets of Fortis.<br /><br />Prot is not alone in wanting to avoid state aid. His comments came as Italy&rsquo;s two biggest banks rejected an offer of government support. Uni Credit said it would raise &euro;4bn in a rights issue instead while Intesa Sanpaolo will raise &euro;1.5bn with a bond issue.