Thursday, Sep 22, 2011

-- BNP Paribas CEO says bank doesn't need to raise new funds

-- Says will meet new Basel III rules by 2013.

-- Government participation is not a working hypothesis says BNP Paribas CEO

-- BNP Paribas CEO says bank could cope with a Greek default

-- No write-downs on Italian debt planned, CEO says

(Adds details, background and quotes from BNP Paribas CEO.) 


 
   By Noemie Bisserbe and Marietta Cauchi 
   Of DOW JONES NEWSWIRES

PARIS (Dow Jones)--France's largest bank by market capitalization, BNP Paribas SA (BNP.FR), isn't in talks with investors from Qatar about a potential stake sale, Chief Executive Baudouin Prot said Thursday in an interview with French television channel BFM Business.

"I formally deny it. We do not have any particular contact [with potential investors] because we do not need to increase our capital," he said.

Prot added that the bank routinely conducts roadshows around the world to talk about the bank's situation.

A person familiar with the matter said separately that Qatar Holding, the investment arm of sovereign wealth fund Qatar Investment Authority, wasn't in discussions with BNP Paribas over a capital injection. There were contacts with BNP Paribas as part of its normal banking relationship, the person said, but added there was no suggestion of Qatar investing in the French bank.

The comments come amid reports that BNP Paribas is talking to sovereign wealth funds in Qatar and Abu Dhabi over taking a stake in the bank, a move that would boost its capital base.

BNP Paribas has taken repeated steps to reassure investors that its finances are solid. A week ago, it announced plans to slash its enormous balance sheet and boost its capital ratios. The bank is seeking to refocus its business on strategic activities, lower its dollar liquidity needs and reduce its assets in order to comply with Basel III capital rules by the start of 2013.

Prot reiterated that BNP Paribas didn't need to be recapitalized and the bank continues to function "completely normally."

"We have the means, today and tomorrow, to fund ourselves," he said. He also said that the French government taking a stake in BNP Paribas was "not a working hypothesis."

BNP Paribas's shares have been under enormous pressure since the beginning of the summer on concerns overs its exposure to Europe's deepening sovereign debt crisis. BNP Paribas holds Italian bonds worth around EUR21 billion and its exposure to Greece stands today at EUR3.5 billion.

Prot downplayed the impact of a possible Greek default saying that the bank could cope with any situation. "Given our financial results for the first semester, we already have the capacity to make new write-downs if necessary on our Greek debt," he added.

Following Standard and Poor's downgrade of Italy's debt on Monday, investors have grown increasingly nervous, and fear new write-downs.

"Fears are exaggerated," said Prot. "There is no reason to believe in an Italian default. Their situation is completely different from Greece ... New write-downs on Italy are out of the question for now."

-By Noemie Bisserbe and Marietta Cauchi, Dow Jones Newswires; +33 1 4017 1740; noemie.bisserbe@dowjones.com

(END) Dow Jones Newswires

22-09-11 1318GMT