(Updated with new items)
PARIS, December 20 (Reuters) – BNP Paribas BNPP.PA announced on Monday that it had reached an agreement with BMO Financial Group
BMO.TO for the sale of Bank of the West, which operates its commercial banking activities in the United States, for an amount of 16.3 billion dollars (approximately 14.5 billion euros).
The operation, entirely in cash, should be completed during the year 2022, subject to the usual conditions precedent, including the approval of the relevant regulatory and competition authorities, BNP Paribas said in a press release.
The bank specifies that the operation should generate, upon completion, an exceptional capital gain (net of tax) estimated at around 2.9 billion euros as well as a positive impact on the Common Equity Tier 1 (CET1) ratio. of about 170 basis points.
BNP Paribas plans to make an extraordinary distribution in the form of share buybacks after the completion of the transaction in order to offset the expected dilution of net earnings per share (NBA).
“As an indication, a share buyback program of around 4 billion euros would completely neutralize the dilution of BNA”, indicates the banking establishment.
The group intends to redeploy the remaining product (equivalent to approximately 7 billion euros of capital release) “gradually and in a very disciplined manner”, he adds.
He referred to an “acceleration” in organic growth, in particular in Europe, targeted investments in “innovative” technologies and models and acquisitions in value-added activities.
In mid-November, several sources reported to Reuters that BNP Paribas was working with advisory banks on a possible sale of Bank of the West, a transaction which, according to these sources, would allow the French bank to raise financial resources to finance its expansion in Europe. .
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BNP Paribas indicates that it will present its main strategic axes as part of the publication of its annual results in early February and that it will provide more details on its 2025 strategic plan during an investor day scheduled for March 14, 2022.
In the United States, the group remains present in corporate and investment banking, for which it recently strengthened its prime brokerage activities. The sale of Bank of the West has no significant impact on the conduct of these activities, assures BNP Paribas.
(Written by Myriam Rivet and Blandine Hénault)