BNP Seeks to Buy Partner Exane to Boost Equities Unit

BNP Paribas SA is seeking to acquire the remaining 50% in Exane that it doesn’t already own, in a move aimed at strengthening its equities business.

Fully integrating Exane would strengthen the range of cash equity and derivative services the French bank can offer, BNP said in a statement on Thursday that didn’t provide financial details. The two companies, which have been partners since 2004, collaborate on prime services, electronic trading, equity derivatives, and equity capital markets.

Chief Executive Officer Jean-Laurent Bonnafe is preparing a new strategic plan that aims to boost revenue at the securities unit and streamline retail operations as the Covid-19 pandemic accelerates a shift toward online banking and increases pressure on European lenders to consolidate. The French bank was one of several lenders to suffer losses last year from equity derivatives, an area of traditional strength, but has been recovering more quickly than peers.

The transaction would continue BNP’s expansion of its equities unit after the integration of Deutsche Bank’s business with hedge fund clients. The French bank’s shares were trading 1.1% lower at 52.2 euros as of 1:46pm in Paris trading on Thursday. So far this year, the stock gained more than 21%.

A deal would allow “the group to create an integrated in-house equities unit with a broad and complete range of services that includes prime brokerage, trading, research as well as custodian services,” Yann Gerardin, deputy chief operating officer and head of corporate and institutional banking at BNP, said by phone.

The deal would give BNP more opportunities, without having a sizeable impact on the bank’s group capital, according to a note from Citi analysts on Thursday. The bulk of Exane’s revenues stem from its cash equities unit, which already operated BNP Paribas’s business in exclusivity. In 2019, the company generated revenue of 346.3 millions euros and net income of about 22 million euros.

BNP earlier this year said it was promoting Gerardin and top retail banker Thierry Laborde to co-chief operating officers once COO Philippe Bordenave leaves his role at the next annual general meeting.

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