PARIS (Reuters) - BNP Paribas (BNPP.PA) has agreed to buy the Belgian state’s 25 percent stake in BNP Paribas Fortis for 3.25 billion euros $4.36 billion (2.72 billion pounds) in a move that will help the country keep its commitment to lower public debt.
It also puts Belgium one step closer to exiting lifelines it threw to multiple banks during the 2008 financial crisis, as European lenders face a slow grind to extricate themselves from state hands.
The Belgian state will make a capital gain of about 900 million euros following the closing of the deal and will keep its 10.3 percent stake in BNP Paribas, the French bank and the Belgian government said in a joint statement on Wednesday.
Belgium’s profits underscore the turnaround effort at Benelux lender Fortis since BNP took it over in 2008 as part of a state-backed rescue. The French bank cut a swathe through Fortis’ balance sheet and integrated its retail footprint.
Belgium had made a pledge to the European Commission to keep debt below 100 percent of economic output and had already secured 1 billion euros through the sale of its share of assets in the ”bad bank’ created after the break-up of Belgian-Dutch lender Fortis.
Belgium also owns all of Belfius, the Belgian former unit of low countries bank Dexia (DEXI.BR) and 53.5 percent of telecom group Belgacom BCOM.BR. BNP Paribas currently holds the remaining 75 percent of Fortis.
”The bank has met its commitments despite a challenging environment,“ Belgian Prime Minister Elio Di Rupo and Finance Minister Koen Geens said in a statement. ”The moment had therefore come for the Belgian state to disengage from BNP Paribas Fortis.
“The sale proceeds of 3.25 billion euros will help the Belgian state to achieve its public debt objectives.”
The deal will have a negative impact of about 50 basis points on BNP Paribas’ Basel III core Tier 1 ratio - currently 10.8 - but will boost 2013 earnings per share by about 3 percent, BNP Paribas said.
($1 = 0.7460 euros)
Reporting by James Regan; Editing by John Irish and Lionel Laurent