BNP Paribas eyes private bank purchases

By Sudip Kar-Gupta

GENEVA (Reuters) - French bank BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz) is examining further possible acquisition opportunities for its fast-growing private banking business, the head of its Switzerland private bank unit said on Tuesday.

"We have a team in charge of looking at opportunities," BNP Paribas Switzerland private banking head Patrick du Saint told the Reuters Wealth Management Summit.

"We are looking at external growth. We want to be sure we pay a good price for what we buy and so we are quite selective."

Private banking counts for around 5 percent of BNP Paribas' total group net profit and du Saint said this contribution was likely to increase. "The general management of the bank wants private banking to grow," he told the Summit held at Reuters' offices in Geneva.

Du Saint said acquisitions were likely to play a role in this development, along with an expansion of its existing business where the company can tap into its retail bank client base.

BNP Paribas' private banking arm has around 135 billion euros ($171.5 billion) worth of client assets. According to figures from Euromoney, it is the market leader for private banking in France, number three in western Europe and number seven in Asia and Latin America.

EYEING GERMANY AND BRITAIN

Du Saint said valuations on many private bank stocks were on the pricey side. "Valuations are a bit expensive. (Paying) five percent of assets under management is too high."

He added that a possible downturn in markets could spur more consolidation among some of the sector's smaller and mid-tier players, but also said BNP Paribas had continued to make private bank takeovers during the recent market boom.

Last year, BNP Paribas bought Dutch private bank Nachenius, Tjeenk and Co, which had more than 1.3 billion euros in assets, from ABN AMRO AAH.AS.

In 2004 the French bank bought a portfolio of Citigroup (C.N: Quote, Profile, Research, Stock Buzz) customers based in Switzerland and acquired Societe Monegasque and Bank von Ernst in Monaco.

BNP Paribas' takeover this year of Italian bank BNL will also allow it to expand its Italian private banking business.

Like many of its peers, BNP Paribas has focused on fast-growing emerging markets such as China, India, eastern Europe and Latin America.

However, du Saint said BNP Paribas lacked scale in private banking in the developed economies of the United States, Germany and Britain.

He said that while the United States' private banking sector remained hard to crack, the French bank was keen to grow in Britain and especially Germany, where acquisitions could play a role. "In Germany, we are clearly weak. We cannot afford not to be there," he said.