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BNP denies Dresdner tie
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September 9, 1999: 5:39 a.m. ET
France's biggest bank says it's not holding merger talks with Germany's number three
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LONDON (CNNfn) - France's Banque National de Paris denied Thursday that it was in merger talks with Dresdner Bank, a deal which would rank as Europe's largest cross-border bank deal.
France's biggest bank has just emerged from a bruising six-month takeover battle for two domestic rivals. While it secured control of Paribas (PPM), regulators blocked its bid for Sociètè Gènèrale (PGLE).
Dresdner, Germany's third-biggest bank, was one of BNP's strongest supporters during the takeover battle. Both remain under pressure to acquire scale amid increasing consolidation among Europe's banks.
A report in the Financial Times said BNP Chairman Michel Pébereau and Dresdner chairman Bernhard Walter met this week to discuss forging closer ties, including the possibility of a full merger.
BNP denied it was in merger talks while Dresdner declined to comment on the report, though an official confirmed its commercial alliances with BNP had resumed, now that the takeover of Paribas had been completed.
Dresdner has already held talks with Germany's biggest bank, Deutsche Bank (FDBK) about merging their domestic retail operations. The bank also said it was exploring alliance options for its investment banking operation, Dresdner Kleinwort Benson (DKB).
Dresdner Wednesday retracted comments by a board member that DKB could form the nucleus of a pan-European investment banking operation.
Analysts suggested a merger of DKB and Paribas, which has a strong investment banking arm, would produce synergies and extend the market reach of both banks.
However, the German insurer Allianz (FALL), Dresdner's largest shareholder, is believed to favor an alliance between the bank and HypoVereinsbank, Germany's second largest. Allianz is seen as a major competitor of BNP's largest shareholder AXA, the French insurer.
Dresdner Bank (FDRB) shares fell more than 2 percent in early trading Thursday. BNP (PBNP) stock added 1 percent.
The bulk of consolidation among European banks has been between domestic players, with cross-border deals limited mainly to Scandinavia, Belgium and the Netherlands.
Domestic deals continue apace, with reports that Italy's largest bank, San Paulo-IMI, is weighing a merger with insurer Istituto Nazionale delle Assicuraziioni, in which it already has an 8.6 percent stake
San Paulo said it would be considering its relationship with the insurer, but declined to say whether the two would merge. The bank is set to lose its domestic number-one spot after the forthcoming merger of second-ranked Banca Intesa and BCI, the Italian number three. 
-- from staff and wire reports
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