Belgium may consider BNP Paribas exit

A market rally has raised expectations that Belgium will sell its €6 billion stake in French bank BNP Paribas, leading the way for other governments to recoup bank bailout funds from the 2008 financial crisis, writes Reuters’ Lionel Laurent. Banking sources say no official talks have begun but some see a deal happening within the year. A sale could encourage other countries with significant bank stakes such as Britain and the Netherlands to follow suit. “It’s possible that a deal will happen this year,” an advisory banker said. “Belgium needs the funds and there is still a bit of upside left in BNP’s shares.” Belgium’s economy has seen only one quarter of growth in the last six months, putting pressure on the government to find new ways to cut the public deficit, while BNP’s share price has soared more than 30% over the past year. Belgium took its 10% stake at €68 per share in 2008 as part of BNP’s rescue of collapsed Benelux bank Fortis, seen today as one of the French bank’s canniest acquisitions. BNP shares today trade almost a third below that level, meaning Belgium would lose money at market prices, but investors and analysts say interest from foreign bidders willing to pay a premium for the use of a convertible bond could offset this. An extended rally could also bump up the price. Cash-rich, sovereign-wealth funds from the Middle East or Asia would be the likeliest buyers for the stake given its size, according to fund managers and advisory bankers.