French bank property retreat opens door to funds

(Full story)


By Lionel Laurent
PARIS, Feb 28 (Reuters) - French banks are beating a retreat from the property sector, leaving a key under the doormat for private-equity investors, insurance companies and sovereign wealth funds.

BNP Paribas, Societe Generale and Credit Agricole are all hawking bundles of property loans to prospective buyers to shrink their balance sheets to meet tough new rules designed to clamp down on risk, according to two Paris-based real-estate bankers.

The potential impact is significant as banks account for two-thirds of European commercial property lending, with more than 384 billion euros' worth of loans maturing in 2012-2014. But prospective buyers and investors like private-equity funds and insurers will be on hand to pick up some of the slack, property market experts say.

"The banks' retreat does have a rather considerable impact on investment...(But) it does leave substantial room for manoeuvre for all the private-equity funds that tend to come from the United States," said Magali Marton, head of EMEA research for property consultancy DTZ.

Bankers go on election charm offensive

(Full story)

By Lionel Laurent and Matthieu Protard

PARIS | Fri Feb 24, 2012 8:41am GMT

Feb 24 (Reuters) - Faced with the prospect of becoming the scapegoats of an increasingly bitter presidential showdown, French banks are stepping up their own campaign to convince the public and politicians of their worth.

Armed with upbeat statistics on loan growth in France and scare stories about what a crackdown on banks could do to the economy, they are pressing their case face-to-face with politicians and wooing the public with advertising campaigns.


One in-demand lunch companion is Francois Hollande, the Socialist presidential candidate taking on conservative incumbent Nicolas Sarkozy. Seen as a pragmatist rather than a firebrand by some bankers, Hollande has nonetheless pledged to break up French banks and slap them with new taxes if elected.

"We recently invited Francois Hollande into our offices and told him our point of view," an executive at one of France's biggest banks told Reuters. "We explained how things were getting dramatic. He sat with us and listened."

Hollande's team declined to comment. 

"Hollande discount" hangs over French banks

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By Lionel Laurent
PARIS, Feb 10 (Reuters) - A declaration of war against the world of finance by French Socialist presidential front-runner Francois Hollande is threatening a rally over the past month in the shares of France's top banks.

Although a wave of cheap funding from the European Central Bank has pushed back the likelihood of a eurozone break-up and restored some confidence in French banks, the prospect of Hollande becoming the first Socialist president in 17 years is worrying some in the markets.

Hollande, a bespectacled career politician who has called finance his biggest foe, has sketched the broad outlines of measures including an extra tax on banks, separating their socially useful activities from those seen as speculative, and a ban on what he calls toxic loans.

The proposals are vague - and there are some doubts as to what extent they would be implemented if Hollande finds himself in the Elysee Palace in May - but they could cut fairly deeply into banks' profits at a time of already sluggish growth.

Keefe, Bruyette & Woods, an investment bank, estimates their impact at around 10 percent of annual earnings for top banks including BNP Paribas and Societe Generale, or a combined 1.7 billion euros ($2.3 billion).

"The measures are a bit fuzzy in our view, and these kinds of worries mean that if the rally continues I doubt French banks will be investors' preferred choice," said Marco Bruzzo, head of Mirabaud Gestion, an asset management company, in Paris.

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

(Full story) (exclusive to Reuters)


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

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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.