No, BNP Paribas did not leave Israel because of the BDS'ers
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French bank BNP Paribas SA (Euronext: BNP) is closing its Israeli branch and downgrading its operations to a representative office. The move will result in 50 layoffs.BNP is keeping a representative office here - it doesn't exactly sound like they're pulling out.
Banking sources believe that BNP is closing the branch because of its inability to gain a substantial standing in the business credit to large companies market. This market is dominated by Citigroup Inc. (NYSE: C), HSBC Holding plc (LSE: HSBA; HKSE: 005; NYSE, Paris: HBC), and Deutsche Bank AG (DAX: DBK; NYSE: DB), which operates a representative office in Israel. BNP Israel tried to focus on credit for infrastructures, water, energy, transportation, and renewable energy, but was unable to consolidate a strong position in the market.
In addition, BNP Paribas is in severe shape because of its exposure to government bonds of Portugal, Ireland, Italy, Greece, and Spain, and it will have to raise capital to comply with capital adequacy ratios.
The day that the BNP retrenching was announced, a friend who represents another European bank here sent me an email asking what BNP was doing with 50 employees in Israel in the first place. Good question given how little business they seem to have been generating.
Labels: BDS
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