BNP Paribas announced on Tuesday that it has acquired AXA Investment Managers, a move that propels the French bank into the top five asset managers in Europe. However, it is still in talks with regulators about the impact of this acquisition on its capital ratio, after the ECB opposed the favorable prudential treatment BNP had hoped for.
The new entity has over €1.5 trillion in assets under management, placing it behind Amundi, UBS Asset Management and Allianz (including PIMCO). The deal, which was completed for €5.1bn last year, strengthens BNP's presence in the European long-term savings management market for insurers and pension funds, with around €850bn under management in this segment. The group is also positioning itself as a major player in ETFs in Europe and intends to accelerate its growth in private assets.
BNP initially planned to acquire AXA IM through its insurance subsidiary Cardif in order to benefit from the "Danish compromise" mechanism, which allows for more flexible treatment of capital requirements for banks that own insurance companies. However, an assessment carried out earlier this year by the European Central Bank called this hope into question, forcing BNP to reduce its profitability forecasts.
The group confirmed on Monday that this would impact CET1 ratio by around 35bp, compared with the 25bp initially anticipated. Discussions with the supervisory authorities are ongoing.
BNP Paribas plans to provide an update on the matter when it publishes its Q3 results on 28 October.
As part of this reorganization, Sandro Pierri, currently CEO of BNP Paribas Asset Management, will take over as head of the group's asset management business. Meanwhile, Marco Morelli, Executive Chairman of AXA IM, will become this new entity's Board Chairman.
