BNP Paribas offloads dollar assets to Wells
WELLS Fargo is buying an energy lending business from BNP Paribas, in the US bank’s latest acquisition from a European bank seeking to shrink its balance sheet.
The San Francisco-based bank is buying $9.5bn (£6.1bn) of total loan commitments, including $3.9bn in funded balances. BNP said the premium paid by Wells and other terms of the all-cash deal were not being disclosed.
BNP said the sale of the Houston-based business was part of its plan to reduce its US dollar funding requirements and would provide a slight benefit to its tier one common equity ratio.
The company said it remains committed to maintaining a strong North American energy and commodities business.
About 90 per cent of the portfolio is US-based, with the rest mostly in Canada, Wells said. Once the deal closes, the combined energy group will have about $30bn in total commitments, said Kyle Hranicky, who leads the Wells Fargo group, which is also based in Houston.
The deal, subject to regulatory and other approvals, is expected to close in the second quarter. The group’s 36 employees in Houston and Calgary will be offered jobs with Wells, BNP said.