(Reuters) – Shares in BNP Paribas fell after French financial media Les Echos on Tuesday reported the Belgian government is considering selling its shares to set up a defence fund.
Shares in the French lender were down 2.6% around 0816 GMT, while the European Stoxx banking index shed 1.1%. Traders attributed BNP’s sharper selloff to the report of the possible Belgian sale.
The stock had been boosted by a 32.5% rise since the beginning of the year, as of Tuesday’s close, peaking at an 18-year high last week.
Through its financial arm, SFPIM, Belgium currently holds a 5.6% stake in the French lender, following the group’s acquisition of Fortis Bank Belgium in 2009.
The Belgian government didn’t immediately reply to a request for comment.
At current market value, the disposal of the 63.3 million shares would be valued at around 4.84 billion euros ($5.22 billion).
Belgium is looking for options to fund its planned increase in defence spending, in order to reach 2% of its gross domestic product this year, the minimum level agreed among NATO allies.
($1 = 0.9269 euros)
(Reporting by Alban Kacher, Jakob Van Calster and Charlotte Van Campenhout; Editing by Ros Russell)
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