The bank for a changing world
|Traded as||Euronext: BNP, OTCQX: BNPQY|
|Founded||23 May 2000|
|Headquarters||Boulevard des Italiens, Paris, France|
|Key people||Baudouin Prot (Chairman)
Jean-Laurent Bonnafé (CEO)
|Products||Asset management, consumer banking, corporate banking, credit cards, investment banking, mortgage loans, private banking, wealth management|
|Revenue||€47.86 billion (2011)|
|Operating income||€9.677 billion (2011)|
|Profit||€6.050 billion (2011)|
|Total assets||€1.965 trillion (2011)|
|Total equity||€85.62 billion (2011)|
BNP Paribas is a French bank and financial services company with headquarters in Paris, and a global headquarters in London. It was formed through the merger of Banque Nationale de Paris (BNP) and Paribas in 2000 and is one of the largest banks in the world. Based on 2012 information BNP Paribas was ranked as the fourth largest bank in the world, as measured by total assets, by Bloomberg and Forbes.
BNP Paribas escaped the 2007–09 credit crisis relatively unscathed reporting a €3 billion net profit for the year of 2008, and €5.8 billion for 2009, both years boosted by profits from trading in its CIB (Corporate and Investment Banking) division. BNP Paribas has one of the highest credit ratings in its peer group with the long term debt of the group currently ranked A+ by S&P, A2 by Moody's and A+ by Fitch.
The firm is a universal bank split into three strategic business units: Retail Banking, Corporate & Investment Banking and Investment Solutions (which includes Asset Management, custodial banking, and real estate services).
BNP Paribas's four domestic markets are France, Italy, Belgium, and Luxembourg. It also has significant retail operations in the United States, Poland, Turkey, Ukraine, and North Africa, as well as large-scale investment banking operations in New York, London, Hong Kong, and Singapore.
BNP Paribas was awarded the 2012 Bank of the Year award by The International Financing Review ("IFR"), Thomson Reuters' leading financial industry publication. The IFR awards are a key industry benchmark and Bank of the Year is the top honour awarded.
- 1 History
- 2 Business units
- 3 Events in 2005
- 4 Notable current and former employees
- 5 Controversy
- 6 See also
- 7 References
- 8 External links
Background and heritage as two banks: 1820 - 2000
BNP (Banque Nationale de Paris)
On March 7, 1848 by the French Provisional Government founded the Comptoir national d'escompte de Paris (CEP) in response to the financial shock caused by the revolution of February 1848. The upheaval destroyed the old credit system, which was already struggling to provide sufficient capital to meet the demands of the railway boom and the resulting growth of industry. The CEP grew steadily in France and overseas, although in 1889 there was a crisis in which it was temporarily placed in receivership.
Separately on April 18, 1932, the French government replaced Banque nationale de crédit (BNC) which failed as a result of the 1930s recession with the new bank Banque nationale pour le commerce et l'industrie (BNCI). The former banks headquarter and staff were used to create BNCI with fresh capital of 100 millions francs. The bank initially grew rapidly through absorbing a number a regional banks that got into financial trouble. After the Second World War it continued to grow steadily. It grew its retail business in France and its commercial business overseas in the French colonial empire.
After the end of the Second World War, the French State decided to "put banks and credit to work for national reconstruction". René Pleven, then Minister of Finance, launched a massive reorganization of the banking industry. A law passed on 2 December 1945 and which went into effect on the 1 January 1946 nationalized the four leading French retail banks: Banque nationale pour le commerce et l'industrie (BNCI), Comptoir national d'escompte de Paris (CNEP), Crédit Lyonnais and Société Générale.
In 1966, the French government decided to merge Comptoir national d'escompte de Paris with Banque nationale pour le commerce et l'industrie to create one new bank called Banque Nationale de Paris (BNP).
Paribas (Banque de Paris et des Pays-Bas)
Banque de Paris et des Pays-Bas (Paribas) was established on January 27, 1872, through the merger of Banque de Crédit et de Dépôt des Pays-Bas, which had been established in 1820 by Louis-Raphaël Bischoffsheim in Amsterdam, and Banque de Paris which had been founded in 1869 by a group of Paris bankers. It went on to develop a strong investment banking business both domestically in France and overseas.
During the period 1872 to 1913, it was involved in raising funds for the French and other governments as well as big businesses through a number of bond issues. It helped the French government raise funds during the first world war and raised further capital and expanded into investments into industrial companies during the great depression. It stagnated and lost assets during the second world war.
After World War II, it missed the nationalisation of the other French banks due to its status as an investment bank and managed to take advantage of that by expanding its operations overseas. It also directs its activity towards businesses and participates in the development and restructuring of French industry including names such as Groupe Bull and Thomson-CSF.
The bank was nationalized in 1982 by the government of Pierre Mauroy under François Mitterrand as part of a law that nationalized five major industrial companies, thirty-nine registered banks and two financial companies, Suez and Paribas. It was re-privatized in January 1987 by the Chirac government.
In the 1990s Paribas had an active policy of acquisitions and divestiture. This included selling the Ottoman Bank to Doğuş Holding, and setting up the joint venture lending company Cetelem in Germany. It sold Crédit du Nord to Société Générale and in 1998 it merged with Compagnie Bancaire, renaming the bank with the official name Compagnie Financière de Paribas.
Founding of BNP Paribas till date: 2000 - till date
In 1999, BNP and Société Générale fought a complex battle on the stock market, with Société Générale bidding for Paribas and BNP bidding for Société Générale and counter-bidding for Paribas. BNP's bid for Société Générale failed, while its bid for Paribas succeeded leading to a merger of BNP and Paribas one year later on 22 May 2000.
On 9 August 2007, BNP Paribas became the first major financial group to acknowledge the impact of the sub-prime crisis by closing two funds exposed to it. This day is now generally seen as the start of the credit crisis and the bank's quick reaction saved it from the fate of other large European banks such as UBS.
On 6 October 2008, BNP took over 75% of troubled bank Fortis' activities in Belgium, and 66% in Luxembourg, in exchange for the Belgian government becoming the new group's major shareholder. The sales of the Fortis shares was suspended by a court order from the Court of Appeal on Friday 12 December
In the end of January, the Belgian government and BNP negotiated for a 75% partnership in Fortis Bank Belgium. Fortis Insurance Belgium would be reintegrated in Fortis Holding.
On 11 February, Fortis' shareholders decided that Fortis Bank Belgium and Fortis Insurance Belgium should not become property of BNP Paribas. However the acquisition was completed and BNP Paribas took 75% share holding and renamed the new subsidiary BNP Paribas Fortis. After this only Fortis Insurance International was left in Fortis Holding and this was renamed as Ageas, a business that had Insurance all over Europe and Asia. The remaining Fortis Bank Netherlands was in the hands of the Dutch Government which merged it with other ABN AMRO holdings it already owned under the name ABN AMRO.
In May 2009, BNP Paribas became the majority shareholder (65.96%) of BGL (formerly Fortis Bank Luxembourg), the State of Luxembourg retaining 34% making BNP the eurozone's largest bank by deposits held.
On 21 September, the bank's registered name was changed to BGL BNP Paribas and in February 2010, BGL BNP Paribas became the 100% owner of BNP Paribas Luxembourg. The transfer was finalised on 1 October 2010 with the incorporation of BNP Paribas Luxembourg's business in the operational platforms of BGL BNP Paribas. In 2013 BNP Paribas was awarded the Bank of the Year award by The International Financing Review ("IFR"), Thomson Reuters' leading financial industry publication. The IFR awards are a key industry benchmark and Bank of the Year is the top honour awarded.
Retail banking is BNP Paribas' largest business unit representing 45% of its 2009 revenues and employing 59% of the group's headcount. Its operations are concentrated in Europe, especially in the group's three domestic markets of France, Italy (where it operates as Banca Nazionale del Lavoro (BNL), and Belgium (as BNP Paribas Fortis). The group also owns an American subsidiary BancWest which operates as Bank of the West in the western United States and First Hawaiian Bank in Hawaii. BNP Paribas's Europe Mediterranean group also runs large retail banks in Poland, Turkey, Ukraine, and northern Africa.
BNP Paribas is the largest bank in the Eurozone by total assets and second largest by market capitalization according to The Banker magazine, just behind Banco Santander. It employs over 201,000 people, according to the bank as of 31 December 2009, of which 80,000 work in Europe, and maintains a presence in 87 countries.
- France: BNP Paribas runs one of France's largest retail banking networks with 2,200 branches and over 3,200 ATMs. In Paris alone the bank has 187 agencies. BNP Paribas serves over 6 million French households and 60,000 corporate customers. In 2009 The French Retail Banking unit (FRB) had revenues of €6.1 billion (15.2% of total group's), income of €1.5 billion (15% of total group's), and employs 31,000 people (15.4% of total group's workforce)
- Italy: In 2006 BNP Paribas purchased Banca Banca Nazionale del Lavoro (BNL), Italy's sixth largest bank at the time. In 2009 BNL had 810 branches in Italy, 2.5 million individual clients, and over 150,000 corporate clients. It grossed €2.9 billion in revenue (7.2% of the total group's) and €540 million of net income (9.3% of the total group's), and employs around 13,000 employees (6.5% of the total group's).
- Belgium: BNP Paribas acquired BNP Paribas Fortis when it acquired the retail banking assets of the Belgian lender Fortis in 2009. This deal also included Fortis's subsidiaries in Poland and Turkey, now grouped in the "Europe Mediterranean" division.
In the United States, BNP Paribas owns BancWest, which in turn operates retail banking subsidiaries Bank of the West and First Hawaiian Bank. Bank of the West operates in 19 Western US states (where it ranks as the 7th largest bank by assets), while First Hawaiian is Hawaii's leading bank with a 40% market share in deposits. Together the two banks operate 710 branches, and service 5 million clients.
The two banks were merged into BancWest 1998, and BNP Paribas took full control of the combined entity in 2001.
The group has a strong presence on niche markets such as lending for marine and recreational vehicles, church lending, and agribusiness. In 2009 BancWest had €2.1 billion in revenues (5.2% of the total group's), and 11,200 employees (5.5% of the total group's headcount). BancWest lost €223 millon in 2009 largely due to its exposure in the subprime mortgage crisis in California, Arizona, and Nevada.
In 2009 BNP Paribas reorganized its retail banking divisions renaming its "Emerging Markets" group the "Europe Mediterranean" group. This change was made because after the integration of Fortis Bank's Polish and Turkish subsidiaries, BNP Paribas's emerging market activities are now heavily concentrated in Eastern Europe and the southern half of the Mediterranean basin.
BNP Paribas is a member of the Global ATM Alliance, a joint venture of several major international banks that allows customers of the banks to use their ATM card or check card at another bank within the Global ATM Alliance with no ATM surcharges when traveling internationally. Other participating banks are Barclays (United Kingdom), Bank of America (United States), China Construction Bank (China), Deutsche Bank (Germany), Santander Serfin (Mexico), UkrSibbank (Ukraine), Scotiabank (Canada) and Westpac (Australia and New Zealand).
Corporate and investment banking
In addition to its retail activities, BNP Paribas is also a leading global investment bank through its Corporate & Investment Banking unit. Although present in all investment banking markets, it is recognized as a global leader in derivatives trading, structured finance, and project finance.
The firm is divided into 6 key business areas:
- Fixed Income: BNP Paribas' fixed income team helps companies hedge their exposure to foreign exchange, interest rate, and credit risks, primarily though the structuring and sale of derivative products such as interest rate and foreign exchange swaps, foreign exchange options and credit derivatives. It also trades in these markets on behalf of clients or for its own proprietary account. On an average day, a quarter of a trillion dollars in fixed income instruments are traded at BNP Paribas Americas’ fixed income trading floor located just blocks from the NASDAQ MarketSite in Manhattan, New York City.
- Equity & Derivatives: BNP Paribas' Equity & Derivatives team helps companies manage their risks and investment portfolios with equity derivatives such as options, futures, and swaps, as well as highly complex, customized solutions such as structured products. It also trades in these markets on behalf of clients or for its own proprietary account.
- Commodity Derivatives: BNP Paribas' Commodity Derivatives team helps clients hedge their exposure to commodity risk though the structuring and sale of commodity futures and OTC commodity swaps. It also trades in these markets on behalf of its clients or proprietary account.
- Investment Banking: BNP Paribas' Corporate Finance team performs most of the traditional investment banking functions of the group including mergers and acquisitions advisory, and equity raising operations such as Initial Public Offerings (IPOs), rights issues, and convertible bond issues.
- Structured Finance: BNP Paribas' Structured Finance group offers clients project finance solutions, export financing, syndicated loans, and financing for acquisitions and leveraged buyouts.
- Corporate & Transaction Group: BNP Paribas' Corporate and Transaction group offers clients simplified flow banking services including trade finance, international cash management, and basic hedging solutions.
In 2009 BNP CIB earned €12.2 billion in revenue (30% of total group's), €4.4 billion in pre-tax income (48.9% of total group's), and 18,000 employees (9.0% of total group's headcount.)
On 11 June 2008, BNP Paribas formally signed the final terms of an agreement to purchase the Prime Brokerage Services division of Bank of America Securities. The sale is widely believed to be completed by the end of the 3rd Quarter, 2008.
- Asset Management: The asset management activities of BNP Paribas are grouped into BNP Paribas Investment Partners. In 2009 BNP Paribas IP had 2,400 employees in more than 70 countries and 518 billion of assets under management.
Events in 2005
On 23 September 2005, BNP Paribas was set to take a 20 percent stake in China's Nanjing City Commercial Bank, a Chinese official and state press reports said. "BNP is going to sign a deal with us to buy a stake next month," an official from Nanjing City Commercial told AFP. The Shanghai-based Oriental Morning Post said BNP would pay up to US$100 million, although the bank official said the figure was incorrect. He declined to give further details. The French newspaper La Tribune reported in August 2005 that BNP Paribas had talked to four Chinese commercial banks—Ningbo, Wuxi, Nanjing and Suzhou—and was prepared to invest US$50–100 million. "We've talked to different financial institutions, but only BNP showed its good faith. It was not easy for us to reach an agreement," the Nanjing City Commercial Bank official said. BNP Paribas refused to comment. The International Financial Corporation, the investment arm of the World Bank, already owns 15 percent of Nanjing City Commercial Bank, which has regulatory approval to list on the country's domestic stock markets.
- France (17%)
- Belgium (11.6%)
- AXA insurance company
- General Mediterranean Holdings
BNP Paribas is one of the most important sponsors of the Tennis French Open in Roland Garros stadium since 1971
- BNP Paribas France (more than 2 200 branches)
- Banque de Bretagne (France – Brittany)
- BancWest (Bank of the West & First Hawaiian Bank in the USA)
- BMCI (Morocco)
- BNP Paribas Egypt (Egypt)
- Banca Nazionale del Lavoro (BNL) (Italy)
- Turk Ekonomi Bankasi (TEB) (Turkey)
- BNP Paribas Fortis (Belgium, Germany, Poland, Turkey)
- BGL BNP Paribas (Luxembourg)
- Sahara Bank (Libya)
- UkrSibbank (Ukraine)
- BCI Mer Rouge Djibouti
- Banque de Wallis et Futuna
- Banque Internationale pour le Commerce et l'Industrie du Sénégal (Senegal)
BNPA Paribas Sofia Bulgaria Branch
- Alfred Berg
- Atisreal renamed BNP Paribas Real Estate
- BNP Paribas Arbitrage
- BNP Paribas Assurances with Cardif, Pinnacle
- BNP Paribas Asset Management
- BNP Paribas Primebrokerag
- BNP Paribas Leasing Solutions with Arval, car leasing and Artegy
- BNP Paribas Securities Services
- BNP Paribas Wealth Management with Isinger de Beaufort, BNP Paribas Private Banking
- LaSer UK with Galeries Lafayette
- SBI Life Insurance Company Limited a joint venture insurance company with State Bank of India, India's largest financial service company, owned by the government of India
- Geojit BNP Paribas
- Creation Consumer Finance
- Lafayette Services
- BNP Paribas Personal Investors Luxembourg
- SAIB-BNP Paribas Asset Management
Notable current and former employees
- Nassim Taleb – practitioner of financial mathematics
- Louis Alphonse of Bourbon, Duke of Anjou – considered by royalists as the head of the French Royal House.
- Jacques de Larosière – managing director of the International Monetary Fund (1978–87); Governor of the Banque de France (1987–93)
- Lorenz of Habsburg, Archduke of Austria-Este
- David McWilliams – economist
- Edmond Turquieh – Founder of Sapiance Capital
In 2010 the French government's Autorité de la concurrence fined BNP and 10 other banks €384 million for colluding to charge unjustified fees on check processing, including extra fees during the transition from paper check transfer to "Exchanges Check-Image" electronic transfer. On 19 January 2011 BNP sued Russian grain trader, OOO Rosinteragroservis, and its subsidiary OAO Kubankhlebprodukt, claiming US$20 million in debts and penalties.
BNP Paribas is the biggest investor in the nuclear sector as a bank, according to Profundo, with more than €13.5 billion in nuclear investments. On 23 October 2011 Greenpeace organised a protest against BNP Paribas in 24 French cities.
- List of investment banks
- List of French companies
- List of banks
- Primary dealers
- European Financial Services Roundtable
- List of investors in Bernard L. Madoff Securities
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- International banking, finance, capital markets news & analysis | Euromoney magazine. Euromoney.com. Retrieved on 2013-12-06.
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- "Five big banks form Global ATM Alliance". ATMmarketplace.com. 9 January 2002. Archived from the original on 7 May 2007. Retrieved 22 June 2007.
- "NY Trading Floor BNP Paribas". cnbc. Feb 2011. Retrieved 6 April 2011.
- "London Trading Floor BNP Paribas". bnp paribas. Feb 2011. Retrieved 6 April 2011.
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- "Leasing Solutions". PNB Paribas. 2010. Archived from the original on 26 February 2011. Retrieved 6 April 2011.
- "Arval". PNB Paribas. Retrieved 6 April 2011.
- "LaSer UK-Home". laseruk.com. Retrieved 2 May 2011.
- Collusion in the banking sector, Press Release of Autorité de la concurrence, République Française, 20 September 2010, retrv 2010 9 20
- Marina Sysoyeva (19 January 2011). "Bnp Paribas Sues Russian Grain Trader Rias, Seeking $20 Million". Bloomberg.com. Retrieved 6 April 2011.
- "STOP Nucléaires, 23 Octobre : Journée nationale de mobilisation!". STOP Nucléaire. Retrieved 20 July 2011.
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