On Tuesday, BNP Paribas (EPA:BNPP) SA (BNP:FP) (OTC: OTC:BNPQY) was confirmed to maintain its Buy rating and a stock price target of EUR76.00, as the bank progresses with its acquisition of HSBC's private banking operations in Germany. This strategic move is poised to more than double BNP Paribas's current size in the German wealth management sector, bringing its assets under management to approximately EUR 40 billion. The acquisition is also expected to bolster the group's overall assets under management in wealth management by about 6%.
The financial specifics of the deal were not disclosed, but based on available information regarding previous interest in the operations, the impact on capital is anticipated to be minimal, at around 5 basis points. HSBC's German private banking operations reported a net profit of USD 44 million in 2023, which equates to roughly 7% of BNP Paribas Wealth Management's profit for the same year, or about 2-3% of the total income and profits of the International Financial Services division.
The transaction, while likely small in scale, is expected to significantly enhance BNP Paribas's presence in the German market, especially among high-net-worth and ultra-high-net-worth individuals. It underscores the bank's commitment to expanding its savings business, as evidenced by its recent acquisition of AXA IM. The completion of the HSBC Germany acquisition is anticipated in the second half of 2025, subject to regulatory approvals.
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