BNP Paribas SA, France's biggest bank, agreed to buy Bank of America Corp.'s prime brokerage unit that caters to hedge-fund customers so it can expand in the U.S.
BNP Paribas is paying as much as $300 million for the business, Todd Steinberg, head of equities and derivatives in Paris-based BNP Paribas' Americas unit, said in an e-mail. The division provides securities lending and secured financing to more than 500 hedge funds and has 320 employees, he said.
``Prime brokerage is an important aspect of doing business with hedge funds,'' Jacques d'Estais, head of corporate and investment banking at BNP Paribas, said in a statement. ``BNP Paribas has all the capabilities to become a leader in the prime brokerage industry.''
Bank of America Chief Executive Officer Kenneth Lewis put the unit up for sale in January, after third-quarter profit at the corporate and investment bank plummeted 93 percent. Profit for the entire Charlotte, North Carolina-based company has declined for three straight quarters, in part because of losses and writedowns tied to the global credit crunch.
Most Bank of America hedge-fund clients are focused on U.S. investments, while BNP Paribas' clients tend to do more international investing, Steinberg said. BNP Paribas plans to offer jobs to all of the Bank of America staff and retain its regional offices in Chicago, Dallas and San Francisco, he said.
Bank of America rose 24 cents to $29.85 at 2:38 p.m. in New York Stock Exchange composite trading, leaving the stock down more than 27 percent this year. The announcement came after the close of trading in Paris, where BNP Paribas rose 1.3 percent today to 60.80 euros ($94.11).
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment