BNP Paribas SA (BNP), France’s largest bank, rose as much as 5.2 percent to a four-month high in Paris trading as European Central Bank President Mario Draghi’s push to set up a bond-buying plan eased concern over the sovereign- debt crisis.
BNP Paribas climbed to 33.66 euros, the highest since April 3, and was up 4.8 percent to 33.53 euros by 1:09 p.m. Credit Agricole SA (ACA), France’s third-largest bank by market value, rose 3.4 percent to 3.67 euros, while Societe Generale SA (GLE), the country’s second-largest bank, added 2.1 percent to 18.91 euros.
“Investors are reappraising Draghi’s comments,” said Jon Peace, a London-based analyst at Nomura Holdings Inc. who has a buy rating on BNP Paribas. “BNP comes on top of the list if investors are more confident and want to get more exposure to euro-zone banks.”
While global markets tumbled on Aug. 2 after Draghi said Spain and Italy would have to formally request a resumption of the ECB’s bond buying in conjunction with Europe’s bailout fund, they rallied the following day as investors concluded that ECB action would happen, even if at a future date.
French banks had $334 billion euros in public and private debt holdings in Italy as of the end of March, the most among foreign lenders, Bank for International Settlements figures show. That’s the lion’s share of the $534 billion in holdings they had in the five troubled European economies. Both BNP Paribas and Credit Agricole operate branch networks in Italy.
BNP Paribas last week posted a smaller-than-estimated drop in second-quarter profit. The Paris-based bank’s core capital target of 9 percent under Basel III rules was “virtually” met by the end of June, six months ahead of schedule, it said Aug. 2.
“BNP showed good capital build and a good breadth of earnings,” said Nomura’s Peace.
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