(Bloomberg) — BNP Paribas SA, long the European Union’s most valuable bank, has dropped to fifth place, highlighting how its stock is trailing peers.
The market value of Spanish rival BBVA SA rose to €91.8 billion ($107 billion) at 11:26 a.m. in Madrid on Friday, above the €90.4 billion for BNP Paribas. Banco Santander SA has the highest valuation among EU lenders, followed by UniCredit SpA and Intesa Sanpaolo SpA.
BNP Paribas has benefited less than many competitors from the end of negative interest rates in Europe a few years ago, partly because of a higher share of fixed-rate loans in France compared to Spain and Italy. Long-time Chief Executive Officer Jean-Laurent Bonnafe is now focusing on boosting profitability at the lender’s large domestic retail business.
European bank stocks have been on a tear since the beginning of the year, with many hitting the highest level in more than a decade. Lenders have been boosted by higher interest rates and, more recently, prospects of a public sector investment spree across the region.
But while BNP Paribas similarly hit a multi-year high earlier this year, its overall increase has been less strong than for many of its peers, especially in Spain and Italy. The bank is now one of just a few major ones in the EU whose price-to-book ratio, which is a common valuation indicator, has remained below 1.
The price-to-book ratios for France’s other big listed banks, Societe Generale SA and Credit Agricole SA, are below 1 as well.
BNP Paribas’ stock has risen about 35% this year to date, compared with roughly 55% for the industry. BBVA is up about 68%.
The Spanish bank’s shares have rallied around 17% since the end of July alone after it unveiled higher payout targets. BBVA, whose formal name is Banco Bilbao Vizcaya Argentaria SA, is also seeking to buy the smaller domestic rival, Banco Sabadell SA.
–With assistance from Jorge Zuloaga.
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