Awards for Excellence 2016
In a world of low growth, negative rates and rising capital charges, it is more important than ever to move away from a reliance on interest income, balance-sheet muscle and physical retail networks. For universal banks, it means investing in digital banking on the retail side, creating a capital and cost-efficient corporate and investment bank, developing a strong and differentiated transaction banking operation and building a compelling fee-generative offer for private clients.
Under CEO Jean-Laurent Bonnafé, BNP Paribas has done all of this. Its return on equity and capital may be lower than, for example, its Scandinavian peers, but it is managing some much tougher markets, not least France and Italy. This is a bank, moreover, that is second only to HSBC by assets, more focused on Europe and reporting higher ROE than its bigger UK rival.
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Yann Gérardin, BNP Paribas: led integration and reduction of RWA’s |
In 2015, the French bank’s revenues were up across all business lines, rising 9% to more than more than €40 billion for the first time. Net income excluding exceptional items rose 7% to €7.3 billion; in the first quarter of 2016 the result was even better, up 10% on the same period in 2015. Perhaps best of all, its tier-1 ratio rose by 60 basis points in 2015, even while it paid a dividend of 45% of earnings – bringing some much-needed cheer to bank investors. In digital banking BNP’s Hello bank! has met with success on the retail side, not just in France, but also in Italy, Belgium, and Austria. BNP Paribas is one of Germany’s biggest digital banks, with 1.6 million customers after the merger of Consorsbank and DAB Bank in 2015, following the latter’s acquisition from UniCredit.
In corporate and institutional banking, 2015 revenues were up 14% to €11.6 billion. It rose three places in Dealogic’s regional revenue league table, as division head Yann Gérardin implemented an integration strategy between securities services and the rest of CIB, and between the bond, loans and acquisition finance platforms. Now the division is embarking on a reduction in risk-weighted assets of €20 billion by 2019, mainly in global markets and structured products.
The depth of client relationships across the BNP Paribas network is reflected from small advisory work for mid-caps in France and Italy right up to helping Belgium-based brewer AB InBev finance its record breaking takeover of SAB Miller (it was global coordinator on a €13.25 billion six-tranche bond). It has also arranged numerous bond and loan financings for Altice, the expansive Netherlands-domiciled, French-owned telecoms firm.
