French banking giant to buy Bank of America unit

Source: Exec Digital USA

Date :6/11/2008 12:22:42 AM

BNP Paribas agrees to buy the hedge fund trading and financing unit of Bank of America Corp.

France’s biggest bank said the purchase, reportedly worth around US$300 million, will allow it to expand in the US. If successful, it will see BNP gain a client base of 500 hedge funds.

Feeling the pinch

The division was put up for sale by Bank of America in January after third-quarter profits plummeted 93 percent. Earnings for the entire Charlotte, North Carolina-based company declined for three straight quarters, because of credit losses and write-downs tied to the global credit crunch.

Of the deal, BNP Paribas said: “This is an activity of weak risk, using little capital and oriented toward client service.”

The Paris-based bank hopes to complete the transaction, which is subject to regulatory approval, in the second half of 2008.