BNP Paribas

BNP Paribas is a French multinational universal bank and financial services holding company. It was founded in 2000 from the merger of Banque Nationale de Paris (BNP, "National Bank of Paris") and Paribas, formerly known as the Banque de Paris et des Pays-Bas. With 190,000 employees, the bank is organized into three major business areas: Commercial, Personal Banking & Services (CPBS), Investment & Protection Services (IPS) and Corporate & Institutional Banking (CIB).
The group is listed on Euronext Paris and a component of the Euro Stoxx 50 stock market index. BNP Paribas is the largest banking group in Europe, and ninth-largest banking group in the world (by assets). It became one of the five largest banks in the world following the 2008 financial crisis. It is considered a systemically important bank by the Financial Stability Board.
In the Forbes Global 2000, BNP Paribas was ranked as the 33rd largest public company in the world.
History
BNP Paribas results from a series of French and international mergers. Particularly notable were the merger of Comptoir national d'escompte de Paris and Banque nationale pour le commerce et l'industrie that formed BNP in 1966, and the latter's merger with Paribas in 1999–2000. Other significant recent transactions involved the acquisitions by BNP Paribas in 2006 of Banca Nazionale del Lavoro in Italy, and in 2008 of Fortis in Belgium and the Netherlands.
Banque Nationale de Paris (BNP)
On 8 March 1848, the French Provisional Government founded the Comptoir national d'escompte de Paris (CNEP) in response to the financial shock caused by the revolution of February 1848. The CNEP soon developed the largest international network of any French bank.
BNCI resulted from the combination over time of a number of pre-existing banks: the Banque franco-égyptienne (est. 1870), which in 1889 became the Banque internationale de Paris; the Banque française d'Afrique du Sud (est. 1895); and the (est. 1913 )
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 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).
In 1990, BNP entered into an alliance with Dresdner Bank and supported a joint venture with Dresdner Bank to enter the Russia market supporting a Dresdner Bank branch in Saint Petersburg with Vladimir Putin's close friend Mathias Warnig as its chairman. This alliance to enter the Eastern European markets continued until December 2000.
The bank was re-privatised in 1993 under the leadership of Michel Pébereau as part of a second Chirac government's privatization policy.
Banque de Paris et des Pays-Bas (known from 1982 as Paribas)
Banque de Paris et des Pays-Bas (Paribas) was established on 27 January 1872, through the merger of Banque de Crédit et de Dépôt des Pays-Bas, whose origins go back to the bank established in 1820 by Louis-Raphaël Bischoffsheim (1800–1873) in Amsterdam, and Banque de Paris, which had been founded in 1869 by a group of Parisian bankers. It went on to develop a strong investment banking business both domestically in France and overseas.
Between 1872 and 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 escaped the nationalisation of 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
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 23 May 2000.
In 2006, BNP Paribas purchased Banca Nazionale del Lavoro (BNL), Italy's sixth-largest bank. 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 the property of BNP Paribas. However, the acquisition was completed, and BNP Paribas took 75% shareholding 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.
BNP Paribas reached an agreement in December 2013 to acquire Rabobank's Polish unit BGZ Bank for around $1.4 billion. In September 2014, BNP completed the purchase of BGZ Bank for a final fee stated in the media to be $1.3 billion. In December 2021, BNP Paribas announced to exit US retail banking business by selling its Bank of the West to the Bank of Montreal for $16.3bn.
Financial data
In 2022, total revenues of €50.4 billion represent an increase of 9% compared to 2021, BNP Paribas remains at the top of the French banks' ranking in terms of activity. During this year, BNP Paribas Group net income attributable to equity holders increased to 7.5% (to 10.2 billion euros). The geographic breakdown of Net Banking Income (NBI) at the end of 2020 is as follows: Europe (72.2%), North America (12.9%), Asia Pacific (8.6%) and others (6.3%).
Corporate identity
The BNP Paribas logo since 2000 (designed by Laurent Vincent under the leadership of the Communications Director, Antoine Sire) is called the "courbe d'envol" (curve of taking flight). The stars allude to Europe and universality. The transformation of the stars into birds conveys openness, freedom, growth, and the ability to change and adapt. The shape and movement of the curve places the logo in the universe of life. The green square symbolises nature and optimism.
Corporate structure
Executive Committee
The General Management and the executive committee are composed as follows:
Jean-Laurent Bonnafé, Director and chief executive officer of BNP Paribas
Yann Gérardin, directeur général délégué, Chief Operating Officer, Corporate & Institutional Banking
Thierry Laborde, directeur général Délégué, Chief Operating Officer, Retail Banking
Laurent David, Deputy Chief Operating Officer
Renaud Dumora, Deputy Chief Operating Officer, Investment & Protection Services
Marguerite Bérard, Head of French Retail Banking
Stefaan Decraene, Head of International Retail Banking
Charlotte Dennery, Director and chief executive officer of BNP Paribas Personal Finance
Bernard Gavgani, Chief Information Officer
Elena Goitini, chief executive officer of BNL
Nathalie Hartmann, Head of Compliance
Max Jadot, CEO and chairman of the executive board of BNP Paribas Fortis.
Yannick Jung, Head of Corporate & Institutional Banking Global Banking EMEA
Board of directors
As of 17 May 2021
Jean Lemierre (chairman), former president of the European Bank for Reconstruction and Development
Jean-Laurent Bonnafé, CEO of BNP Paribas
Jacques Aschenbroich, chairman and CEO of Valeo
Pierre-André de Chalendar, chairman and CEO of Saint-Gobain
Monique Cohen, partner at Apax Partners
Wouter De Ploey, CEO of ZNA
Hugues Epaillard, BNP Paribas Real Estate executive
Rajna Gibson Brandon, professor at the University of Geneva
Marion Guillou, global food security academic
Major shareholders
As of 31 December 2022
European institutional investors (37.7%)
Non-European institutional investors (31.6%)
Belgian State (through SFPI) (7.8%)
Amundi (6.0%)
BlackRock Inc. (6.0%)
Retail shareholders (5.6%)
Employees (4.3%)
Grand Duchy of Luxembourg (1.0%)
Main subsidiaries
Retail banking
BNP Paribas France (more than 2 200 branches)
BNP Paribas Bulgaria
BancWest (Bank of the West in the USA)
BNP Paribas El Djazaïr (Algeria)
BMCI (Morocco)
Banca Nazionale del Lavoro (BNL) (Italy)
Turk Ekonomi Bankasi (TEB) (Turkey)
BNP Paribas Fortis (Belgium, Germany, Poland, Turkey)
BGL BNP Paribas (Luxembourg)
Hello bank!
Sahara Bank (Libya)
Ukrsibbank (Ukraine)
BCI Mer Rouge Djibouti
Banque de Wallis et Futuna
BNP Paribas Bank Polska (Poland)
Other subsidiaries
Alfred Berg
BNP Paribas Arbitrage
BNP Paribas Assurances with Cardif, Pinnacle
BNP Paribas Investment Partners
BNP Paribas Partners for Innovation
BNP Paribas Personal Finance UK (Creation Financial Services Limited and Creation Consumer Finance Limited)
BNP Paribas Primebrokerag
BNP Paribas Real Estate (formerly Atisreal)
BNP Paribas Leasing Solutions with Arval, and Artegy
BNP Paribas Securities Services
BNP Paribas Wealth Management
Cetelem
Consors Finanz
Cortal Consors
FundQuest
SBI Life Insurance Company Limited a joint venture insurance company with State Bank of India, India's largest financial service company
Sharekhan, an Indian retail brokerage firm
L'Atelier BNP Paribas
BNP Paribas Personal Investors Luxembourg
Protection 24
SAIB-BNP Paribas Asset Management
Divisions
BNP Paribas CIB
BNP Paribas CIB (Corporate and Institutional Banking) is the global investment banking arm of BNP Paribas, the largest banking group in the world. In October 2010, BNP Paribas was ranked by Bloomberg and Forbes as the largest bank and largest company in the world by assets with over US$3.1 trillion.
BNP Paribas CIB's main centres are in Paris and London, with large scale operations in New York, Hong Kong, and Singapore, and smaller operations in almost every financial centre in the world. It employs 185,000 people across 56 countries and provides financing, advisory and capital markets services. BNP Paribas CIB is a globally recognised leader in two areas of expertise: trading derivatives on all asset classes, and structured financing. BNP Paribas CIB also has a large corporate advisory network in Europe and Asia. BNP Paribas CIB has 13,000 clients, consisting of companies, financial institutions, governments, investment funds and hedge funds.
BNP Paribas CIB benefits from the Group's large asset base (over €2 trillion) and diverse business model, and is proving resilient in the economic and financial crisis that has been affecting the banking sector since 2007. Revenues from BNP Paribas CIB nearly doubled in the second quarter of 2009 as robust investor demand boosted revenues from the bank's fixed income trading business unit. CIB's revenues totaled €3.351 billion (US$4.82 billion) for the quarter, up 81 percent from the second quarter of 2008, and following record revenues of €3.696 billion in the first quarter of 2009.
BNP Paribas Asset Management
BNP Paribas Asset Management is the dedicated, autonomous asset management business of BNP Paribas Group.
History
In 2007, BNP Paribas regrouped its function in asset management under the brand name BNP Paribas Investment Partners.
In 2010, the closing of the transaction between BNP Paribas Investment Partners and Fortis Investments was completed.
In June 2017, BNP Paribas Investment Partners rebrands as BNP Paribas Asset Management.
Notable current and former employees
Business
Nassim Taleb – Practitioner of financial mathematics, author of The Black Swan, Fooled by Randomness and Dynamic Hedging, and former BNP Paribas prop trader in New York City.
Politics and public service
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
Other
David McWilliams - economist
Controversies
Antisemitic allegations
In 2016 BNP reached a $40m settlement with a Jewish employee. The employee had been made to watch a training video. The film portrayed Adolf Hitler as the CEO of Deutsche Bank, one of BNP's competitors and the Nazi soldiers around him as Deutsche Bank executives. The video showed Hitler screaming at the soldiers. Also, his colleagues made a number of anti-semitic comments during his time at BNP Paribas.
Business with sanctioned countries
On 30 May 2014, The Wall Street Journal reported that the United States Department of Justice was negotiating a possible guilty plea with BNP Paribas as well as the size of the resulting fine for violating U.S. regulations and evading US sanctions. The Justice Department sought a fine of more than US $10 billion, which was expected to be reduced to $8 or $9 billion in negotiations. BNP Paribas was said to have laundered up to US$100 billion from the sanctioned countries of Sudan, Iran, and Cuba.
On 1 July 2014, BNP Paribas pled guilty in a New York state court to falsifying business records as well as conspiracy in connection to those falsifications. It was also expected to plead guilty in federal court to violating laws against money-laundering. It agreed to pay $8.9 billion, the largest fine ever for violating U.S. sanctions, and substantially more than the previous record of $1.9 billion. BNP Paribas was also barred for one year under the plea agreement from certain US dollar-dominated transactions. The fine exceeded the bank's $6.4 billion 2013 annual income and the $1.1 billion it previously had allocated for the anticipated fine.
The bank's failure to cooperate with the multi-year investigation was given as a significant factor in the size of the fine. Additionally, BNP Paribas continued to process sanctioned transactions after the investigation began. After the fine was announced, BNP said it would be "just fine" and that it had "a comprehensive plan" to avoid similar violations in the future. The company's stock, which had fallen 12% since news of the investigation first leaked, rose 4% on the announcement. To comply with the transaction ban, BNP Paribas will use a third party to clear its US transactions.
Check processing
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.
€152 million risk management affair
The German Frankfurter Allgemeine Zeitung FOCUS, Bloomberg and the French Les Échos newspapers published an article regarding a €152 million mistrade (erroneous trade) in which BNP Paribas Arbitrage was allegedly involved. The bank has sold securities for €326,400 to the investor Armin S. but the value of the securities is €163 million according to the bank. According to the article, the error remained unnoticed for several days. BNP has even reconfirmed the original price.
The Financial Times published an article in March 2018 about the case with the title "BNP Paribas failed to book trades in Germany for a week". It cites internal documents that show it did not book all trades that happened in structured products in Germany from 2 to 9 December 2015. The Financial Times estimates that 8,500 trades might have been affected. It also questions if the bank has hedged their positions if the trades have not been booked.
Sponsorship
BNP Paribas has been a major sponsor of tennis. In 1973 it became the major sponsor of the French Open, one of the four prestigious Grand Slam tournaments in the sport. In 2001 the bank began to sponsor the Davis Cup before becoming the title sponsor in 2002. In 2002 it became the sponsor of the Paris Masters, an ATP World Tour Masters 1000 tournament.
In 2008 it became the sponsor of the BNP Paribas Primrose Bordeaux, an ATP Challenger Tour tournament. The company's sponsorship expanded to the United States in 2009 when it became the title sponsor of the Indian Wells Masters, an ATP World Tour Masters 1000 two-week tournament in California. It also sponsored the BNP Paribas Showdown and BNP Paribas Tennis Classic exhibition tournaments held in New York City and London respectively. The Stanford Classic, since 1992, is instead directly sponsored by the Bank of the West subsidiary.
See also
BNL BNP Paribas headquarters
European Financial Services Roundtable
List of banks
References
BNP Paribas
Banks established in 2000
Banks under direct supervision of the European Central Bank
Companies listed on Euronext Paris
CAC 40
Companies in the Euro Stoxx 50
Investment banks
Primary dealers
Systemically important financial institutions