Awards for Excellence 2016: BNPP builds on BancWest-ern promise

World's best bank: Other European banks may be quitting the US, but it remains an important contributor to BNP Paribas’ revenue stream.

It has not been plain sailing for BNP Paribas in the US since an $8.9 billion settlement in 2014 for enabling transactions from sanctioned countries. But in Bank of the West, BNP Paribas retains one of the top 30 banks in the country, with $75.7 billion in assets. The US holding company, BancWest, which also includes First Hawaiian Bank, has close to 600 offices in 23 states. 

Last year, BancWest’s revenues (in euro terms) rose 26.7% and it provided BNP Paribas with €910 million in pre-tax income, confirming its standing as one of the main contributors to the group’s results. That was more than either the Belgian or Italian businesses. It also enjoyed solid growth in the first quarter of 2016, with deposits up 5.1% year-on-year, and loans up 7.5%. 

By comparison, Santander’s US business has been sputtering for the last three years. HSBC’s acquisition of Household International led to it having to sell almost half of its US retail branches and its credit card division. RBS sold its last remaining stake in Citizens Bank last year. Indeed, alongside BBVA with BBVA Compass, BNP Paribas is in a league of its own. 

Many European banks are also exiting wealth management in the US. Barclays sold its US brokerage to Stifel last summer. Credit Suisse offloaded its US wealth management arm to Wells Fargo. Deutsche Bank sold Alex Brown to Raymond James. Other than UBS, only BNP Paribas is sticking around. 

BNP Paribas says it wants to become one of the top five European banks in the US – which is typically unambitious of the French bank – but the truth is, it could well become one of the top three. That’s thanks to its ability to act like a community bank, a commercial bank and a global wealth manager all at the same time. 

There are capital pressures, however. BNP Paribas is preparing for an IPO of First Hawaiian Bank, which analysts welcome for the capital boost, while fretting about the loss of future earnings. Some are even asking if the same may be planned for Bank of the West, although the bank’s global leadership dismiss this. 

Nandita Bakhshi-300
Nandita Bakhshi, Bank of the West
Group executives in Paris talk enthusiastically about the recent hire of Nandita Bakhshi as CEO of Bank of the West. A veteran of TD Bank and Washington Mutual, she has extensive experience in both US consumer banking and in the development of digital channels. She also provides a pointed answer to those critics who complain that BNPP only promotes senior executives from within. 


BNP merged the French Bank of California with Bank of the West in 1980. In 1998, First Hawaiian Bank merged with Bank of the West and a separate holding company was formed to include the two US entities – BancWest Corporation. Now, as other foreign banks in the US are being forced to establish an intermediate holding company, BNP Paribas has a head start.

Bank of the West passed the Federal Reserve’s Dodd-Frank Act stress tests in 2014 and in 2015. Santander stumbled at the stress tests, while Deutsche Bank failed last year. 

Senior executives at BNP Paribas talk a lot about synergies and integration across divisions, but in the US analysts say that the decision to keep Bank of the West fairly separate and apply a hands-off approach has worked well. Its success is partly a happy accident of geography. Being headquartered in San Francisco has had distinct advantages when it comes to fintech and digital banking. Andy Harmening, vice-chairman of consumer banking, says Bank of the West has been investing in innovation for the last eight years on its own. It has been partnering with several fintech firms, as well as fintech incubator Plug and Play. 

At the same time, in BNP Paribas, Bank of the West finds an enthusiastic partner. The French bank has invested heavily in technology and digitization across the world. It also has one of its L’Atelier BNP Paribas offices in San Francisco where it connects with tech entrepreneurs. 

That commitment from the parent has given Bank of the West a boost. For example, the multi-channel customer relationship management platform for Bank of the West has been mutualized from that of BNP Paribas’ domestic market. Harmening says: "We are now able to use data to tell us what clients prefer as a channel – the branch, ATM, digital – and then we can build the user experience around that."