French touch

4 November 2010 By Pierre Briancon

BNP Paribas and Société Générale both insist they won’t need to issue equity to comply with new Basel rules. They are also resisting extra buffers for systemic banks. However, that doesn’t mean they would necessarily oppose other forms of capital, like contingent convertibles.

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BNP Paribas, France's largest bank, on Nov. 4 ruled out a capital increase to meet stricter regulatory requirements, after reporting net income of 1.9 billion euros in the third quarter of the year, up 46 percent over the same period of 2009.

Baudouin Prot, BNP's chief executive, said that the bank's core Tier 1 capital ratio in January 2013 would be "comfortably" above 7.5 percent, exceeding the minimum requirements set by the Basel III agreement.

Société Générale, BNP's smaller rival, on Nov. 3 said its core Tier 1 capital ratio would be 7.5 percent in 2013, also ruling out the need for any capital increase.

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