Wells Fargo among bidders for BNP $11B energy book -sources

(Full story) (FT first broke the news BNP was selling the book; we were first to name Wells Fargo, which eventually won, as a bidder)


By Lionel Laurent
PARIS, Jan 27 (Reuters) - BNP Paribas, France's largest listed bank, is aiming to sell up to $11 billion of loans to oil and gas companies and has received interest from Canadian buyers, according to two banking sources familiar with the situation.

The sale is the latest sign of retreat by European banks, which have faced months of funding turmoil as a result of the euro zone debt crisis and are pushing to offload dollar assets to shrink their balance sheets and build precious capital.

The cutbacks are putting pressure on dollar-focused industries such as energy, shipping and aerospace. Indonesian tanker firm Berlian Laju is teetering on the brink of default, while Swiss refiner Petroplus filed for bankruptcy on Tuesday.

BNP Paribas, which according to one banker opened its energy loan-book up to potential buyers just over a month ago, has whetted the appetite of several banks in North America, particularly Canada, according to sources.

"The $11 billion figure was cited ... There is certainly Canadian interest," one banker familiar with the deal said. "Our feeling is that it is inevitably going to be broken down into chunks."

Another source said that in addition to Canadian buyers, BNP had received interest from U.S. banks including Wells Fargo and had been getting offers with a discount of less than 5 percent of the value of the loan.

"The cost of funding is killing BNP's margins so they want to get out," the source said. The portfolio contains long-term loans to energy companies that do not have the cash flow to fund their own exploration or production activities, he added.

Interview with the financier profiting from banks' pain

By Lionel Laurent and Matthieu Protard

PARIS, Jan 25 (Reuters) - Behind the doom and gloom of European banks offloading assets and scaling back lending in the face of the euro zone debt crisis, at least one financier is hoping to profit from their pain.

Veteran French banker Laurent Quirin, who heads financial services group Kepler Capital Markets, told Reuters on Wednesday his firm was broadening its reach beyond equity brokerage and poaching top talent from banks just as they were pulling back.

Kepler earlier this month launched a new business line designed to help banks offload "illiquid" - or hard to sell - assets such as mortgage-backed securities or consumer loans that would interest investors with available cash to hold them.

"We've already got quite a few mandates in this field," Quirin, 47, said in an interview at Kepler's Paris headquarters. "We have several mandates from European banks, including French ones."

French banks such as BNP Paribas and Societe Generale are at the centre of a fresh wave of asset sales across Europe's financial sector, with banks putting loan portfolios and entire activities on the block to build up precious loss-absorbing capital.

SocGen and smaller domestic rival Credit Agricole also still hold piles of toxic assets left over from the 2008 financial crisis, which they are gradually selling.

"Some products that were at some point securitised are still being held by banks, insurers and "bad-bank" structures," said Quirin. "These players can't hold them anymore."

Kepler, named after the pioneering 17th-century astronomer Johannes Kepler, narrowly escaped collapse in 2008 when the fall of its Icelandic parent Landsbanki pushed Quirin to lead a management buyout of the broker he co-founded a decade earlier.

Kepler's history of prudent business and total avoidance of proprietary trading meant its clients stayed loyal despite the crisis, said Quirin, who now wants to grow fixed-income and advisory amid a tough stock-market environment.

The new illiquid-assets business, headed by former SocGen banker Pascal Marionneau, is part of this strategy. Kepler has also set up a new structured-products unit under Nicolas Miara-Godet, another former SocGen banker, which has access to the capital resources of 22 partner banks.

The company got a vote of confidence last year when it raised 57 million euros in fresh capital by selling minority stakes to investors including French fund BlackFin and state bank Caisse des Depots. Management and employees still own 53 percent of the group.

Kepler is looking at possible acquisitions to add to its new business lines, according to former Credit Agricole banker Quirin.

"We're looking at a number of assets that might interest us, that might allow us to offer new business lines or to complement our existing lines," he said.

Kepler is targeting revenue of around 120 million euros ($155.77 million) this year after 100 million last year. The split between equities and other businesses is around 50-50, according to Quirin.

Quirin added there were no plans to extend a strategic alliance with Italy's Unicredit in Western European equity brokerage.

French banks get choosy on clients

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By Lionel Laurent
PARIS, Jan 18 (Reuters) - French banks BNP Paribas and Natixis are to focus investment-banking activity on a select list of large clients to help preserve capital and cut debt amid the euro zone debt crisis, according to memos obtained by Reuters.

The moves are a fresh indication that pressure on European banks to boost capital buffers and secure funding lines is threatening to overturn years of relationship-building as lenders fight for survival.

BNP, France's biggest listed bank, said in a document sent to employee representatives it was refocusing on "key strategic" clients and looking to cut its dollar net asset base by half at its structured-finance division, partly via asset sales.

"Our cuts in risk-weighted assets force our client coverage teams, in each zone and each country, to redefine the priority lists of preferred clients," it said. "This selection takes into account the currency of the client's financing, the client's past and future profitability and cross-selling opportunities."

Smaller rival Natixis, meanwhile, is to exit non-core activities and create a Global Transaction Banking unit offering cash management and trade finance, targeting 200 million euros ($255 million) revenue by 2015-16, according to a written presentation given to employee representatives on Jan. 13.

BNP Paribas has means to save jobs, says auditor

(Full story)

By Lionel Laurent and Matthieu Protard
PARIS, Jan 15 (Reuters) - France's biggest listed bank, BNP Paribas, could save jobs and soften the pain of its investment-banking cutbacks by scrapping its dividend for 2011, according to an auditor's report obtained by Reuters.
BNP is eyeing almost 1,400 staff cuts at its corporate and investment bank as part of a plan to scale back lending in the face of the euro zone debt crisis and to cut hundreds of billions of euros from its balance sheet.
The bank has started to restructure its real-estate lending and its leasing divisions and is planning a global retrenchment in corporate and investment banking (CIB), like many European banks, audit firm Ethix said in a report sent to employee representatives.
However, unlike less financially robust domestic rivals Societe Generale and Credit Agricole, BNP has refused to rule out paying a dividend for 2011. Management has so far only said that it will be reduced.
Such a decision may please shareholders but also means employees will feel the full brunt of the cutbacks, according to Ethix. In keeping with French practice, the audit firm has been appointed to analyse the plan and assist unions in talks with management.
"(Scrapping the dividend) would allow for a less drastic restructuring of the corporate and investment bank and fewer job cuts," said the Ethix report, which estimated 170 French staff could be saved as a result.

Interview with Dexia's CEO on asset-sale progress

(Full story)

By Lionel Laurent and Julien Ponthus

PARIS | Wed Jan 11, 2012 12:20pm GMT

(Reuters) - Dexia (DEXI.BR) has received over thirty expressions of interest for its asset-management arm and hopes to decide on the sale of its Turkish unit Denizbank by the end of February, the rescued Franco-Belgian bank's chief executive told Reuters on Monday.

The planned asset sales were first announced back in October as part of a bailout plan that would see Dexia broken up and its local-government lending arm merged into a new structure with French state-backed investors.


"Regarding Dexia Asset Management, the process will be launched in a very small number of weeks...We have picked an advisory bank," Pierre Mariani said in an interview. "We have received over thirty (expressions of interest)."

The CEO refused to comment on the reported pull-out of Britain's HSBC (HSBA.L) from the bidding for Denizbank (DENIZ.IS) but said Dexia "should be in a position to make a decision on Denizbank before the end of February."

Investment banks face more pain as SocGen plans emerge

(Full story)


By Lionel Laurent and Christian Plumb
PARIS, Jan 10 (Reuters) - Societe Generale's freshly overhauled management team is promising more pain for its investment bank unit this year, sounding a deeply pessimistic note likely to be echoed by rivals in France and elsewhere in Europe.

The news that France's second-biggest lender is eyeing a "significant" fall in investment banking revenue for 2012 and has decided to exit or deeply cut several businesses is the latest dollop of pain for investment banks worldwide after businesses such as debt and equity capital markets were hammered last year.

For SocGen's domestic rivals BNP Paribas and Credit Agricole, SocGen's plan to drastically scale back in areas like property and shipping finance and physical energy trading, could offer a roadmap for further retreats on what used to be key business lines.

The French banks' erstwhile empire-building designs in particular have been throttled in recent months by an evaporation in dollar funding as U.S. investors spooked by the euro zone crisis have dashed for the exits.

But the cutbacks at SocGen, which recently brought in a new chief financial officer formerly at rival Credit Agricole and replaced its corporate and investment banking chief, also reflect a grisly environment for investment banks worldwide as once reliable businesses such as stock issuance have dried up.

"Today, they're preparing for an environment in which funding is harder and harder to come by, and it's as a direct result of that that they're restructuring," said Francois Chaulet, a fund manager at Montsegur Finance in Paris, which owns shares in both SocGen and BNP Paribas.
"At the same time, you have markets and an economy which are depressed, and thus there's not very much top-line growth potential for the investment banks."

Secret SocGen memo warns of tough times ahead

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By Lionel Laurent and Matthieu Protard
PARIS, Jan 9 (Reuters) - French bank Societe Generale (SOGN.PA) is forecasting a "significant" drop in 2012 investment-bank revenue compared with 2011, weighed by higher funding costs and efforts to slash its balance sheet, according to an internal memo obtained by Reuters on Monday.

France's second-biggest listed bank has also decided to exit or strongly reduce property, shipping and aircraft financing activities, as well as physical energy trading in North America, according to the 245-page memo sent to employee representatives.

"(SocGen) CIB expects a significant drop in revenues for 2012 compared with 2011, weighed by higher charges linked to funding and balance-sheet reduction," the memo said.

A spokeswoman for SocGen said the bank had already warned that its moves to cut debt and shrink its balance sheet would see revenues fall by 750 million euros ($955.32 million). "(This) is a significant drop and excludes charges linked to asset sales," she said.

SocGen to replace private bank head, sources say

(Full story) (exclusive to Reuters)


(Reuters) - French bank Societe Generale (SOGN.PA) is set to announce an overhaul of its private banking unit that will see Daniel Truchi replaced as head of private banking, according to several sources familiar with the matter.

SocGen, France's second-listed bank, is cutting jobs, selling assets and overhauling management under Chief Executive Frederic Oudea as it seeks to restore investor confidence after a brutal 2011.
"Operationally, (Truchi) is stepping down as head of the private bank," one of the sources told Reuters.

(reporting by Lionel Laurent and Julien Ponthus)