PARIS BNP Paribas (BNPP.PA) may unite U.S. retail unit BancWest with its U.S. investment bank in a bid to offset the impact of proposed tougher rules for foreign banks in the United States, a source close to the bank said.
The move, which would boost the financial strength of BNP's investment bank by tying it to a lucrative retail deposit base, would resemble past asset reshuffles by France's largest bank in markets like Belgium to cope with a global toughening of bank rules since the 2008 crisis, the source said.
"(BNP) recently reshuffled some of its business lines to reduce the funding gap in markets like Belgium," the source told Reuters on condition of anonymity.
"Given the fact that the U.S. is one of (its) two big growth areas, along with Asia, we can expect this kind of restructuring there as well."
A BNP spokesman declined to comment. The Financial Times said in an earlier report that the plan was for a "full-blown merger" of the bank's U.S. operations.
By relying less on short-term debt markets to paper over cracks in its funding structure, BNP would be safer in the eyes of U.S. regulators such as Federal Reserve board member Dan Tarullo, whose plan to force foreign banks to bolster their capital and liquidity levels has seen European banks push back.
BNP is one of the few big European banks to own a retail franchise in the U.S. While it is difficult to estimate how big BNP's funding gap is there, analysts at Morgan Stanley have said the new rules could leave Germany's Deutsche Bank (DBKGn.DE) with a $7-9 billion capital deficit by 2015.
"It would appear at first glance that it is possible that BNP could merge its U.S. operations and be able to adhere to minimum capital requirements," Espirito Santo analyst Andrew Lim said in a note to clients.
"It may be the case, though, that there could still be significant incremental funding requirements for BNP's U.S. operations as a whole if these are to be sourced independently rather than provided by BNP group," he added.
(Reporting by Lionel Laurent and Dominique Vidalon; Editing by Greg Mahlich and Mark John)