BNP Paribas plans sale of €70 billion of assets
14 Sep 2011
Top French bank BNP Paribas plans to sell €70 billion ($96 billion) of risk-weighted US dollar corporate- and investment-banking businesses to allay investor concerns over its leverage and funding, even as its main rivals had to suffer ratings downgrades.
This will enable it to expand its tier 1 capital ratio to 9 per cent by 2013.
Though BNP managed to retain its rating, Moody's said, it would extend its review for a possible downgrade of BNP's long-term debt and deposit ratings.
According to some analysts, it could only be a matter of time before BNP Paribas followed in the wake of other French banks as it announced a restructuring plan to increase capital to head off a downgrade.
French banks are taking steps to restore confidence after their stocks suffered heavily on fears of overdependence on wholesale market funding that would render them ill equipped to cope with the fallout from a Greek debt default.
Meanwhile, the industry's main regulator, Bank of France governor Christian Noyer called the downgrade of Credit Agricole and Societe Generale by Moody's as ''very small'' pointing out that the ratings agency said the banks had enough capital to cover any losses.
