Magazine article American Banker

U.S. Banks Aren't Such a Hot Ticket

Magazine article American Banker

U.S. Banks Aren't Such a Hot Ticket

Article excerpt

Byline: Matthew Monks

Royal Bank of Canada and ING Group NV both agreed to sell their U.S. banks in the past week. How many more international banks could follow their retreat?

A few, experts say. Eight other foreign banks own major U.S. banks, and three of them are considered candidates to unload some or all of their stateside operations.

One is officially exploring its options: HSBC Holdings PLC of London. The other two experts peg as potential sellers are Edinburgh's Royal Bank of Scotland Group PLC and BNP Paribas of Paris.

The other foreigners that own a top 50 U.S. bank have the means and desire to take a bigger piece of the U.S. market, experts say. That includes Sovereign Bank owner Banco Santander SAS and BBVA Compass owner Banco Bilbao Vizcaya Argentaria SA.

Marty Mosby, an analyst with Guggenheim Partners LP, said that outside of a few "unique situations," most international banks here are not "ready to start exiting."

International banks are reluctant to leave the U.S. because the country's long-term prospects are good and its economy is in better shape than other parts of the world, experts in investment banking and private equity said. Most of the major foreign banks with a stateside presence have been buyers in recent years, not sellers.

But some institutions, such as BNP Paribas, the owner of BancWest Corp. of San Francisco, may not have a choice but to sell.

Moody's Investors Service raised market speculation that BancWest could go up for sale after putting its two banking units on review for possible downgrades. BNP Paribas credit rating could fall because of its exposure to the financial crisis in Greece, Moody's said. That could make it harder for it to support its U.S. bank, Moody's said.

ING had to divest its online U.S. bank under orders from regulators; Capital One Financial Group Inc. …

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