BNP Paribas Considering Sale of U.S. Unit Bank of the West
BNP Paribas Considering Sale of U.S. Unit Bank of the West
(Bloomberg) -- BNP Paribas SA is considering a sale of its U.S. arm Bank of the West, according to people with knowledge of the matter.
The French lender is working with JPMorgan Chase & Co. and Goldman Sachs Group Inc. to gauge interest from prospective bidders, the people said, asking not to be named as the matter is private. The talks are at an early stage and a deal is not certain, the people said.
BNP Paribas Chief Financial Officer Lars Machenil said in October that the Paris-based bank was “keeping its eyes open” regarding the unit, which it has held for more than four decades. Bank of the West had historically been a key part of BNP Paribas expansion into the U.S., though its strategic value has dimmed in recent years.
BNP, Goldman Sachs and JPMorgan declined to comment.
Reuters reported the talks earlier, saying the deal could value the business at about $15 billion. Potential contenders for the business could include Canada’s Toronto-Dominion Bank and Bank of Montreal, as well as Pittsburgh-based PNC Financial Services Group, according to Bloomberg Intelligence.
What Bloomberg Intelligence Says
“Using previous deals as a yard stick, we believe the $15 billion price tag for BancWest suggested in a Reuters report may prove too rich for any U.S. or Canadian buyers. We believe that a $12-$13 billion range may be more attainable.”
-- Jonathan Tyce, senior banking analyst. For the full note click here.
BNP, which makes roughly equal amounts from its investment bank, its core-markets retail operations and its international activities, posted above-expectations profit in the third quarter as an economic recovery kept defaults at bay, allowing it to release some provisions. The bank is also planning a 900-million-euro ($1 billion) stock buyback as part of a new strategic plan for 2022-2025.
Chief Executive Officer Jean-Laurent Bonnafe is pursuing a strategy of using the financial strength of Europe’s most profitable lender over the past three years for opportunistic, bolt-on transactions, including in businesses that peers find too risky or capital-consuming such as prime brokerage.
BNP purchased Bank of the West in 1979 and merged it with other acquisitions including United California Bank in 2001. It had $96 billion in assets at year-end 2020 and 553 retail banking locations.
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