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BNP Paribas hikes capital, pays back state

French bank BNP Paribas launched a capital increase for €4.3 billion ($6.30 billion) and said it was reimbursing the French state early on its capital advance made during the financial crisis.

BNP said it would, as of October, reimburse the €5.1 billion in non-voting shares subscribed to by the French State on March 31 and will make a payment of €226 million, calculated over the seven-month period.

Following the transaction, BNP Paribas will have €59.4 billion Tier one shareholders' equity and its Tier one ratio will be over 9% on a pro forma basis as at June 30.

BNP Paribas said its earnings capacity and the organic generation of equity ensures that the group maintains financial flexibility to continue to grow in an environment where capital requirements are more stringent.

“Thanks to the State's intervention, French banks have played an important role in helping the economy and their customers during the crisis,” chief executive Baudoin Prot said in the statement.

“BNP Paribas has increased its loan advances in France by €5.5 billion over the last 12 months,” he added. (Reuters)