BNP Paribas , one of the euro zone's biggest banks, is seeking to expand in Asia and the United States while reducing its funding exposure to Italy, one of its core European markets, the French bank's chief executive told the Financial Times.
The strategy would be in keeping with previous signals by CEO Jean-Laurent Bonnafe, who took the reins in December and has indicated BNP would look for growth after a period of retrenchment aimed at bolstering its balance sheet and reducing its exposure to the debt-laden euro zone.
"For me it is quite obvious that we start with Asia, we start with a couple of key businesses, one of those businesses being the fixed-income platform. And U.S. is part of that game," Bonnafe was quoted as saying.
Although financial markets have rallied in the wake of recent European Central Bank promises to boost confidence by buying sovereign bonds, investors are looking for more long-term strategic plans from banks like Paris-based BNP, analysts said.
"They are taking a vocal stance but it remains to be seen whether it has substance," said Christophe Nijdam, Paris-based analyst at Alphavalue. "The market is waiting for a clear strategy from the French banks, which have yet to show a lot of willingness to reveal their business plans."
BNP, which has more than half of its loan exposure in the euro zone, has joined rivals like Societe Generale and Credit Agricole in worldwide cutbacks since a flare-up in the euro zone crisis last year yanked once-cheap market funding from their grasp.
BNP has also sought to reduce the potential risk of a break-up of the currency zone by making some units more reliant on their own funds rather than on the parent's, with one strategy involving asset reshuffles across markets.
This might see BNP's Italian unit BNL issue its own debt to fund operations, according to the FT, though it did not attribute these comments precisely to Bonnafe. A spokeswoman from BNP declined to comment.
Investors see BNL, which remains funded for 18 billion euros by BNP's Paris headquarters, as one of the big drags on the group's shares, the FT wrote.
U.S., ASIA GROWTH
Asia represents 12 percent of BNP's non-retail revenues, which in turn account for half of the bank's total revenues.
In the United States, BNP aims to expand its fixed income and wealth management businesses, mainly through its California-based unit Bank West, according to the paper.
In a June presentation, BNP said it was in "expansion mode" in the Asia-Pacific region and said it wanted to grow cross-selling between certain product lines such as corporate finance and wealth management, without giving any numbers or details.
The bank has also set its sights on Turkey, north Africa and the Gulf countries, the FT said, adding that details of BNP's expansion drive would be announced by the end of the year.
With BNP recently having reached a key capital target six months ahead of schedule, some analysts said the bank would now be freer to turn its hand to strategic planning.
"BNP's management, as with other big banks, has a very long-term view," said a Paris-based analyst. "There are elections on average every six months in Europe and it's mostly politics that makes it complex ... We are not like the U.S. where power is more centralised."
(Additional reporting by Caroline Jacobs; Editing by Elaine Hardcastle and Mark Potter)