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BNP is withdrawing from the American private customer market
Photo: Charles Platiau / REUTERS
The major French bank BNP Paribas is selling its Californian subsidiary Bank of the West to the Bank of Montreal (BMO) from Canada.
The purchase price is 16.3 billion US dollars, announced BNP.
The French are thus ending their involvement in the American private customer market, which has never really been crowned with success because the competition from domestic banks is fierce.
Management expects the deal to be completed within the coming year.
The shareholders should benefit from this: BNP then wants to buy back its own shares from the market.
In addition, she wants to use the proceeds from the sale to expand her own business and for possible takeovers.
The authorities have yet to approve the sale.
Greater focus on investment banking
The BNP subsidiary, based in San Francisco, operates more than 500 branches and offices in 24 US states, primarily in the West and Midwest.
According to its own information, it has almost 1.8 million customers and employs more than 9,000 people.
The sale makes sense for BNP Paribas, said fund manager Ion-Marc Valahu of asset manager Clairinvest.
"Bank of the West was not a strategic subsidiary of BNP Paribas."
BNP Paribas bought the US retail bank in 1979 and merged it with the French Bank of California.
The US subsidiary is BNP Paribas' largest segment outside of Europe.
The French want to play a stronger role in the more lucrative European investment banking market and have, among other things, incorporated the prime brokerage business of Deutsche Bank and Credit Suisse.
This includes the processing and financing of financial transactions for hedge funds.
hej / dpa / Reuters