HONG KONG/PARIS (Reuters) - BNP Paribas (BNPP.PA), France’s largest bank, said on Monday it planned to sell a “limited” part of its stake in South Korean lender Shinhan Financial Group Co Ltd (055550.KS) while keeping their strategic partnership intact.
The sale comes as European banks face pressure to cut costs from tougher regulation and an uneven economic recovery.
Reuters earlier reported the French bank was offering 4.75 million shares in Shinhan for between 47,000 and 48,650 won each, according to a source with direct knowledge of the deal, effectively meaning a total price-tag of up to $218 million.
“The present financial operation is a limited adjustment,” a BNP spokeswoman said. “It is part of BNP Paribas’ active balance sheet management and does not reflect any strategic change in the business relationship between the two institutions.”
Prior to the sale, BNP Paribas owned a 6.35 percent stake in Shinhan, equivalent to about 30.1 million shares.
BNP is in the early stages of a drive to save 2 billion euros ($2.74 billion) in annual costs by 2015, as banks across Europe look to lure investors back to the crisis-scarred sector with the promise of profitable growth despite a tough economic environment and global curbs on risk taking.
Other banks are also eyeing disposals among their Asian businesses.
BNP’s main rival Societe Generale (SOGN.PA) is selling its Asian private bank, people involved in the deal process have told Reuters, and Spain’s BBVA (BBVA.MC) has agreed the sale of a $1.3 billion stake in China’s CITIC (601998.SS).
Overall, BNP is aiming to ramp up revenue and staff in Asia to offset economic weakness in the euro zone, where it is heavily exposed, and in July took its first step into China’s insurance market by buying Dutch bank ING’s ING.AS stake in a partnership with Bank of Beijing (601169.SS).
Reporting by Elzio Barreto in Hong Kong and Lionel Laurent in Paris; Editing by Denny Thomas, Clarence Fernandez, James Regan and David Evans