French Bank Sells Stake in Australian Lender

SYDNEY -- Banque Populaire Group has sold a stake in Australia's Bank of Queensland for 352 million Australian dollars (US$363 million), taking advantage of strong performance by the nation's banking stocks.

The French co-operative was Bank of Queensland's largest single shareholder prior to Tuesday, with a stake of 8.7% held through entity BRED Banque Populaire. It also had a 2.7% stake held through Paris-based asset manager DNCA Finance SA, which is half-owned by private-equity firm TA Associates.

The stock sold at A$9.80, a 2.3% discount to Bank of Queensland's closing price of A$10.03.

Bank of Queensland shares had reached their highest level since 2011 earlier Tuesday. The stock has risen 36.5% this year.

Earlier this month, the lender reported first-half net profit of A$100.5 million, compared with a A$90.6 million loss a year earlier, including a write-down on commercial real-estate loans.

"This transaction ensues from an asset reallocation decision as part of the normal management of our investment portfolio," Bruno Lorthiois, a spokesman for BRED Banque Populaire, told The Wall Street Journal. He added that DNCA acts as an asset manager for an investment vehicle used by BRED.

Shares in Australian banks, which are heavily weighted in the nation's benchmark S&P/ASX200 index, have performed well, leading investment managers, including Schroders PLC, to question whether they are overvalued.

But many investors, who seek stable and sizable dividend income, believe they aren't. After reporting strong interim results Tuesday, Australia and New Zealand Banking Group Ltd. jumped 5.8% to close at A$31.84 a share.

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