BNP Paribas SA (BNP:FP) Maintains Buy Rating and Targets EUR 76.00 Amid HSBC Acquisition
In a strategic move to expand its presence in the German wealth management sector, BNP Paribas SA has confirmed its Buy rating and a stock price target of EUR 76.00 as it progresses with the acquisition of HSBC's private banking operations in Germany. This acquisition is expected to more than double BNP Paribas's current size in the German wealth management market, increasing its assets under management to approximately EUR 40 billion and boosting the group's overall assets under management in wealth management by about 6%.
While the financial specifics of the deal were not disclosed, the impact on capital is anticipated to be minimal, around 5 basis points. HSBC's German private banking operations reported a net profit of USD 44 million in 2023, which represents 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.
Despite the small scale of the transaction, the acquisition is expected to significantly enhance BNP Paribas's presence in the German market, particularly among high-net-worth and ultra-high-net-worth individuals. It highlights the bank's commitment to expanding its savings business, following the recent acquisition of AXA IM. The completion of the HSBC Germany acquisition is projected to take place in the second half of 2025, pending regulatory approvals.
In summary, BNP Paribas's acquisition of HSBC's private banking operations in Germany is set to reshape its position in the German wealth management sector, signaling growth opportunities for the bank and potential benefits for investors. Stay tuned for further updates on this development and its impact on the financial market.