BNP Paribas SA has finalized its purchase of AXA SA’s investment
unit, creating one of Europe’s largest asset managers.
The newly formed business will have more than €1.5 trillion ($1
.8 trillion) in assets u
nder management, according to a release from the French bank on Tu
esday. Return on invest
ed capital is expected to exceed 14% in 2028 and 20% a year later.
The acquisition will see BNP Paribas benefit from AXA Investment Ma
nagers “market position and expertise” in lucrative assets clas
ses such as private credit, infrastructure and real estate. The deal mark
s an “important moment for the entire” bank, Chief Executive Of
fer Jean-Laurent Bonnafé said in the release.
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However, BNP Paribas has been unable to use a beneficial capital
treatment that it was factoring into the transaction when fir
st announcing it las
t year. That’s because the European Central Bank has taken a negati
ve view on applying the so-called Danish Compromise whe
management units through their insurance business, a deal structure chosen by the French bank.
BNP Paribas on Tuesday confirmed previous guidance that the AXA IM acquisition will reduce its capital strength m
easured as CET1 ratio
by about 35 basis points. “Discussions with supervisory authorities are still ongoing,” it said.
It said it will “update on the progress of the operation” at third-
quarter results and it’s also planning an investor day in the first quart
er next year that will be “focused on the group’s trajectory including this operation.”
Photo credit: Jason Alden/Bloomberg