Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

No strategy and a beige suit

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014

Read more

ENCORE!

Alain Choquette: A Hilarious Magician in Paris

Read more

FOCUS

France welcomes Iraqi Christian refugees

Read more

FRANCE IN FOCUS

Emmanuel Macron: A new economy minister with a pro-business agenda

Read more

THE OBSERVERS

More of this year's best Observers stories

Read more

#TECH 24

Changing the world, one video game at a time

Read more

IN THE PAPERS

Socialist Party summer conference kicks off in explosive atmosphere

Read more

  • Kerry calls for 'coalition of nations' to battle IS militants

    Read more

  • EU leaders meet in Brussels to seek a response to Russia

    Read more

  • Exclusive: Fabius warns of further sanctions against Russia

    Read more

  • IMF stands behind Lagarde amid French corruption probe

    Read more

  • Ebola drug ‘ZMapp’ heals all monkeys in study

    Read more

  • British killer escapes from French psychiatric hospital

    Read more

  • Police hunt for British boy with brain tumour taken to France

    Read more

  • Ukraine to relaunch NATO membership bid

    Read more

  • Suriname leader’s son pleads guilty to courting Hezbollah

    Read more

  • Mapping Ukraine: Canada and Russia in ‘tweet for tat’ row

    Read more

  • France shines in IMF list of world’s promising economists

    Read more

  • Chelsea’s Torres set for AC Milan switch

    Read more

  • First case of Ebola confirmed in Senegal

    Read more

  • Obama has 'no strategy yet' against IS militants in Syria

    Read more

  • Netflix to woo French with ‘House of Cards’ set in Marseille

    Read more

  • French businesses ‘hoping for a new Thatcher’

    Read more

  • The deleted tweets of Manuel Valls

    Read more

  • Libyan PM resigns as Islamists set up rival administration

    Read more

  • Syrian refugees surpass three million, UN says

    Read more

  • UN says 43 peacekeepers captured in Golan Heights

    Read more

  • Peru seizes record 6.5 tonnes of Europe-bound cocaine

    Read more

Business

BNP Paribas to repay state aid earlier than planned

Text by NEWS WIRES

Latest update : 2009-09-29

French bank BNP Paribas announced on Tuesday that it will raise 4.3 billion euros of new capital in order repay 5.1 billion euros of state aid it received, earlier than expected. The French government should earn a significant return on its money.

AFP - French banking giant BNP Paribas announced on Tuesday that it will raise 4.3 billion euros (6.3 billion dollars) of new capital to repay state rescue funding from October.

The bank, which is repaying the support several months earlier than expected, said that it no longer needed the state aid because the landscape for banking and profits had improved, and revealed that the state will earn a significant return on its money.

For the first half of the year, the bank had reported a net profit of 3.2 billion euros.

BNP Paribas said that it intended to free itself from October from preference shares provided by the state to inject 5.1 billion euros at the height of the banking crisis early this year.

In repaying the help, the bank would also pay the French state a fee of 226 million euros calculated on seven months use of the money, the bank said.

This works out at a gross return for the state of about five percent over seven months.

BNP Paribas "will repay from October the 5.1 billion euros of preference shares underwritten on March 31 by the French state and will reward it with 226 million euros calculated over seven months," it said in a statement.

At the time of the support, the bank had agreed with the state and with European Union competition authorities that the funds would be repayed as soon as possible.

The charge for the use of the money was calculated to rise with time to encourage quick repayment, the bank explained.

The aid would be repayed with money raised from the capital increase together with the creation of shareholders' funds established mainly through the payment of dividend in the form of shares. This would amount to 750 million euros.

In addition, there would be an increase in the capital allocated to employees, amounting to 260 million euros, the bank said.

BNP Paribas said that given the way the environment had changed and a strong performance by the group, the state aid was no longer needed.

Once the arrangement has been completed, BNP Paribas will have shareholders' funds of 59.4 billion euros under the so-called Tier One calculation of the highest quality capital.

The ratio of this capital to the weighted risk carried by the bank would then be more than 9.0 percent, the bank said.

The French state became the biggest single shareholder in the bank on buying for 5.1 billion euros preference shares without voting rights.

In June, the managing director of BNP Baudouin Prot had said that French banks in receipt of state support would begin repaying at the beginning of next year.

Date created : 2009-09-29

COMMENT(S)