France’s biggest bank to pay back with a little help from its friends
BNP Paribas, France’s largest bank, says it wants to raise $6.27 billion to pay off government bailouts. It will likely will be followed by others as global markets begin to resemble a sort of normality again. Some of this government cash, you see, came with limits on executive compensation and close scrutiny of business practices, and banks hope to inch out from under this microscope. BNP Paribas said the G-20’s agreement that banks should raise more capital had influenced its timing, as had a sharp rise in its stock price this year. However, the state’s presence as a shareholder was not connected to the bank’s repayment decision. Analysts were positive, saying it will now be “first come, first served” for banks in attracting funds. Italy’s UniCredit, planned to raise €4 billion in a share sale and Intesa Sanpaolo planned to sell securities. In the UK, Lloyds and RBS are considering raising capital via stock or asset sales and France’s Société Générale says it may begin reimbursing the state “from early 2010.” BNP, in its statement, said, “state intervention to provide equity and liquidity, key in the midst of the financial crisis, has fully achieved its objectives.”
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