BNP Paribas to „take a pause” in US acquisitions
„How long this pause will last, I have no idea,” said Clamon in an interview in Paris yesterday. There won't be further purchases „for the time being, in the immediate future. Market conditions are not really favorable.” Service industries in the US expanded at the slowest pace in more than three years in September, a report from the Institute for Supply Management showed yesterday. A housing market slump is limiting consumer spending and growth. Paris-based BNP Paribas has spent more than $8.5 billion since 1999 buying banks in the US The company's BancWest Corp. unit has 739 branches and about 4.2 million accounts in 20 US states, including California and Hawaii. In the second quarter, pretax profit at BancWest climbed 11%, less than the 30% increase at the French retail bank. „We can feel there is a growing frustration among the French management of the group that BancWest is not doing as much as it should,” wrote Jacques-Henri Gaulard, an analyst at Merrill Lynch & Co., in an August 15 note to investors.
Clamon said yesterday that the US remains „a very interesting country in the long term for banking activities.” He also said BNP Paribas isn't considering the sale of BancWest. „The frustration is coming more from the current market conditions in the US than from BancWest itself,” Clamon said. „But I have huge confidence in the US In the medium term, the US will deliver higher economic growth than Europe and this gap will remain.” Shares in BNP Paribas have climbed 27% this year, beating the 16% increase by the 75-member Bloomberg Europe Banks and Financial Services Index. They gained 2.3% to €86 yesterday, reaching a record. „BancWest is a good business operating in a cyclically weak environment, which will ultimately turn around,” said Robin Down, an analyst at HSBC Holdings Plc in London, who has an „overweight” recommendation on the stock. „If they sold now, the price would reflect US economic weakness.” French daily La Tribune earlier yesterday reported that Citigroup Inc., the biggest US bank by assets, is considering four European lenders as possible targets, including BNP. Clamon said that becoming a possible takeover target „is not a concern” for BNP Paribas. He declined to comment on the article in La Tribune. (Bloomberg)
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