BancWest sale to solve BNP Paribas' cash shortage issue - SocGen

First Hawaiian

18/03/2022 13:34

** Societe Generale upgrades French BNP Paribas  PNPP.PA  to
"buy" from "hold", saying it is becoming a "better version of
itself" after the planned sale of its U.S. unit BancWest 
    ** The sale solves the bank's "nagging shortage" of capital
and expansive balance sheet - brokerage 
    ** "The long hunger march on running a capital-constrained
bank is over, and the enormous balance sheet is on track to slim
down," SocGen says 
    ** The $16.3 bln profit from the deal with Bank of Montreal
 BMO.TO  should also address the issue with growing dominance of
its corporate and investment banking, which could prove negative
in choppy markets, the brokerage adds  urn:newsml:reuters.com:*:nL1N2T50CA
    ** By shedding the U.S. unit, BNP has acquired strategic
flexibility and the available capital of around 10 bln euros
should put it in pole position to upgrade its footprint -SocGen
    ** However, the stock underperformed despite its relatively
defensive balance sheet and minimal net exposure to the war in
Ukraine, as it has been harder hit by the sector's sharp
correction, the brokerage notes 
    ** "We believe that the 0.6x TBV (tangible book value) on
which the stock is currently trading represents a good
opportunity to buy into the shares," SocGen says

 (Reporting by Dagmarah Mackos)
 ((dagmarah.mackos@tr.com))