BNP Loses Belgium as Largest Investor as Country Cuts Stake

Belgium is selling about a third of its stake in BNP Paribas SA in a move that will end the country’s run as the bank’s largest shareholder.

(Bloomberg) — Belgium is selling about a third of its stake in BNP Paribas SA in a move that will end the country’s run as the bank’s largest shareholder.

A Belgian government-owned investment company, known as SFPI-FPIM, plans to sell a stake equivalent to about €2.2 billion ($2.3 billion) in the French lender, according to terms seen by Bloomberg. The disposal will reduce the investment company’s holding to about 5.1% from about 7.8%.

BNP Paribas fell as much as 4.6% in Paris trading, the steepest drop since June.

The disposal comes as rising interest rates boost valuations of banks after years of subpar returns, giving governments a window to exit lenders they bailed out during the financial crisis. Other banks that have seen governments reduce their stakes include Dutch lender ABN Amro NV and Natweest Plc. in the UK.

Belgium became BNP’s largest investor in 2009 following the rescue and breakup of Fortis, which was the nation’s largest financial-services group before the global financial crisis. BNP Paribas took over Fortis’s banking assets in Belgium and Luxembourg. 

BNP declined 3.7% at 9:56 a.m. in Paris, leading European bank stocks lower. The shares are still up about 30% over the past 12 months. 

BNP has emerged as one of the financially stronger lenders in the region as many rivals were forced to restructure when stricter regulations and negative rates weighed on earnings in the years after the crisis. It announced plans in early February to buy back €5 billion of shares after the sale of its US unit.

Belgium said in the release that it continues to support BNP Paribas and believes in its “long-term strategy.”

SFPI-FPIM plans to dispose of about 33.3 million shares at a price guidance of €64.96 via an accelerated bookbuild today. The price represents about 1.8% discount to the Tuesday closing level. The joint bookrunners are BNP Paribas, BofA Securities, Goldman Sachs International. 

SFPI-FPIM will receive its expected dividend for 2022 of €3.90 per share, subject to approval by BNP Paribas shareholders at their May annual meeting, the terms show.

BNP Paribas’s shares were trading below 40 euros when investors approved its takeover of Fortis, which turned Belgium into the largest shareholder.

Read our 2009 story: Fortis Gets Approval for Bank Sale to BNP Paribas (Update2)

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