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The inbound calls to Canadian banks from European lenders looking to shed assets are only going to pick up, if the results from BNP Paribas (BNPQY.PK) Wednesday morning are any indication.

BNP Paribas said it had plans to shrink its business and balance sheet to generate a big improvement in capital ratios, and that means selling loans. BNP said it is only a third of the way through its plan, and already the bank's assets are down by close to €33 billion.

The bank's year-end balance sheets show a €19 billion decline in loans to customers relative to the end 2010. Other assets have also shrunk, while at the same time, the bank is stockpiling cash. Overall, the balance sheet has shrunk to €1.97 trillion in assets from2 trillion.

While BNP has actually been increasing lending in its home countries in Europe, which will come as a big relief to eurozone policymakers concerned that shrinking banks will hammer economic growth by holding back loans, lending in the rest of the world is on a significant decline.

The bank's big focus is on dropping dollar-denominated assets, which have become tougher to fund. Its US-dollar assets have plunged 30% in just six months, and loans to customers in US dollars are down $22 billion to $144 billion. Trading assets are down even more sharply, from $68 billion to $37 billion.

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Source: BNP Paribas Shrinks Balance Sheet Fast