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