BNP Paribas (BNPQY) interested in the acquisition of the public company ABN Amro

BNP Paribas SA BNPQY has expressed interest in a possible acquisition of public company ABN Amro Bank NV. The news was first reported by Bloomberg, citing people familiar with the matter who asked not to be identified as the information is private. Notably, the Dutch consumer lender, ABN Amro, has been government-owned since the 2008 financial crisis.

People familiar with the matter said BNP Paribas had recently approached the Dutch government for a meeting to discuss its interest in a deal. ABN Amro’s retail and corporate franchise is attracting the interest of BNP Paribas. In addition, BNPQY sees in this operation an opportunity to develop in Northern Europe.

BNP Paribas’ preliminary contact has not yet resulted in detailed negotiations and the Dutch government is not seriously considering interest at this time. One of the people said that the state might prefer to sell other shares on the market, which would allow it to raise funds, while retaining some control.

Even though some other banks have approached the Dutch government to express their interest in ABN Amro, there is no certainty that any of them will result in a formal offer as the deliberations are ongoing. Representatives of BNPQY and ABN Amro declined to comment on the matter.

Nonetheless, after agreeing to sell its Bank of the West unit to Bank of Montreal for $16 billion in cash, BNP Paribas should have additional capital for any potential deal. The sale of its US retail business is expected to close this year.

Notably, under government ownership, ABN Amro has grown from one of the largest banks in the world to a Dutch-focused consumer lender.

Earlier this year, the Dutch government asked NLFI (which holds ABN Amro’s stake on behalf of the state) to advise it on the potential sale of shares in the bank. But a spokesperson said: “Since the ministry has a stake in ABN Amro, it has had regular talks with various stakeholders on a wide range of topics. The decision on possible new sales transactions is determined based on several factors.

Over the past decade, cross-border bank mergers in Europe have not been very popular as negative interest rates have weighed on earnings. However, a recent push to relaunch negotiations on a single market for banks, as well as rising interest rates, have boosted the prospects for trading despite the possibility of a recession in Europe.

Over the past year, BNPQY shares have lost 22% against an industry decline of 14.2%.

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Currently, BNP Paribas carries a Zacks rank No. 2 (buy). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Inorganic Growth Efforts by US Banks

Earlier this month, to bolster its presence in North Carolina, ETF Corp FNB has signed an agreement to acquire Greenville-based UB Bancorp. The all-stock deal is valued at $19.56 per share, or nearly $117 million.

After the deal closes, which is expected in the last quarter of 2022, FNB Corp will likely move to eighth position in North Carolina in terms of deposit market share. Additionally, the 11 basis point cost of deposits will be accretive to the company’s finances in a rising rate environment.

Huntington Bancshares Incorporated HBAN recently completed the acquisition of Capstone Partners, a leading investment bank and advisory firm. The acquisition was announced in March and helped HBAN create a full-service banking experience for customers of its growing capital markets and commercial banking franchise.

Capstone and Huntington Bancshares are poised to offer a comprehensive set of banking solutions spanning traditional commercial banking, investment banking and capital markets. The agreement also strengthens HBAN’s expertise in 12 primary industry sectors and expands its geographic reach.

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