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Greek Crisis May Put California Bank in Play

NEW YORK ( TheStreet) -- BNP Paribas (BNP) may be forced to sell Bank of the West, California's fifth largest bank, as the European debt crisis continues to create problems for the French banking giant.

Moody's Investors Service put BNP, Credit Agricole and Societe Generale on review for downgrade this week citing their large exposure to Greek debt as the country struggles to avoid defaulting on its debt.

Greek woes has worsened this week as Standard & Poor's cut the country's debt rating to triple-C--its worst rating for any country in the world.

BNP spokeswoman Isabelle Wolff wrote via email that the bank has no comment regarding Bank of the West, though she argues the bank's exposure to Greece is "negligible," at EUR5 billion in government bonds and exposure to Greek banks is also "negligible." In all, exposure to the country represents just 0.6% of BNP Paribas' total commitments, according to Wolff.'

One former investment banker who spent some 20 years advising on U.S. bank M&A argues U.S. Bancorp (USB - Get Report) would be a logical buyer for Bank of the West, which has some $58 billion in assets . A U.S. Bancorp spokesman declined to comment.

U.S. bank M&A has been slow this year, and just three big assets are reported to be in play. All of these involve non-U.S. banks exiting U.S. businesses. The assets for sale include HSBC (HBC)'s credit card business and ING Groep (ING - Get Report)'s U.S. online bank, both of which are being pursued by Capital One (COF). The other big asset is Royal Bank of Canada (RY - Get Report) U.S. operations, for which BB&T (BBT - Get Report) is thought to be the most likely bidder. RBC's U.S. bank, based in Raleigh, N.C., is less than half the size of Bank of the West, with just over $27 billion in assets.

-- Written by Dan Freed in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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