French banks deny capital raising plan

TOP French banks BNP Paribas and Société Générale have denied that they could seek to raise a combined €11bn (£9.47bn) as part of a broader European bank recapitalisation plan.

A French newspaper had reported that the country’s first and second largest banks by market cap would seek about €7bn and €3-4bn respectively.

A BNP spokeswoman denied the report, reiterating that it planned to reach Basel III capital targets without a capital increase. SocGen also denied the report and also said it would reach Basel III targets without a capital increase.

The newspaper report, which did not cite sources, follows one in a German paper saying that the top five French banks had agreed to receive €10-15bn in fresh capital from the French state as long as Deutsche Bank agreed to a government capital injection as well.

French banks have come under pressure as investors worry about their access to funding.

It is thought that most European banking groups would prefer a European recapitalisation mechanism, possibly run by the European Banking Authority (EBA), to avoid the stigma of tapping it.