Awards for Excellence 2002
BNP Paribas
The award for most improved debt house had plenty of contenders this year, but BNP Paribas tipped the balance across the board. This is thanks to its strong showing in the corporate credit market in Europe (where it ranks third behind Deutsche Bank and Citicorp/Salomon Smith Barney), its growing strength in structured credit and credit derivatives, and the increasingly attractive synergies emerging from the merger of BNP and Paribas.
“BNP Paribas is now a much more powerful player than people thought it might have been,” says David Ovenden, the firm’s global head of credit. “We are firing on more and more cylinders, but we still have less developed franchises to work on.”
Like all the European houses, BNP Paribas faces an uphill struggle in the US debt market. Only Deutsche and UBS have made any real headway against the US bulge-bracket firms in the past year.
For the European firms, the key priority in the past two years has been to secure competitive advantage on their own turf – especially in the fast-developing European corporate credit market.
This year’s evidence suggests that they are succeeding. Universal banks have profited at the expense of the pure investment banks. And the decision to combine BNP and Paribas, which prompted criticism, now looks wise.
BNP Paribas has improved its profile in the European syndicated loan market over the past two years and the bank’s loan and bond divisions are increasingly working together on financings and client coverage, although Ovenden concedes that “there is always room for improvement”.
Structured credit is also booming, under the leadership of ex-Merrill Lyncher Michael Donahue and credit derivatives head Farid Amellal. And in securitization, BNP Paribas is working to broaden its business beyond areas where it is already dominant, notably Italy and France.
But it is in European corporate credit that the firm has made its mark. BNP Paribas ranks third for all euro-denominated bonds, second for corporate bonds in euros and first in triple-B corporate bonds – the fastest-growing and most lucrative area of the market.
Besides its leadership in European corporate deals, the firm has also led euro issues for a wide range of borrowers from Asia, Australia, North America and emerging markets such as Russia, Lebanon, Turkey and South Africa.
“We have worked hard to secure our base in Europe, which is critical,” says Ovenden. “We probably have the most profitable European corporate business and we didn’t have the luxury of subsidizing from a very big, profitable pot in the US our forays into other markets.”
Nick Evans
