Best bank – BNP Paribas
Best debt house – BNP Paribas
Best equities house – BNP Paribas
Best M&A house – Goldman Sachs
Best local partner – Rothschild
BNP Paribas is the best bank in France again this year. The mercurial Michel Pébéreau will shortly hand over to Baudouin Prot, currently COO. As long as Pébéreau stays on as chairman, though, it is difficult to believe that the bank’s strategy will change much. Investment banking consumes about a third of capital; the rest is devoted to domestic and international retail, specialized financial services, wholesale banking and asset management. Only time will tell if the decision not to bid for Crédit Lyonnais was the right one.
In the meantime, though, Société Générale has made noticeable progress in its debt business this year, BNP Paribas still has the edge, particularly when it comes to corporate issuance. BNPP has lead managed bond deals for names including La Poste, Accor, Electricité de France, Saint-Gobain and Danone. Its most spectacular success over the past 12 year, however, was the jumbo transaction of almost e9 billion for France Telecom, completed in January. Raising this much money, right at the beginning of the year, helped FT out of a tight spot and induced new confidence in the company’s future among investors. Particularly impressive was a e1 billion 30-year tranche. BNPP was bookrunner on several key loans this year, including e3.85 billion for Vivendi Universal in February and another e2.5 billion in May. Also this year, the bank launched the fifth MasterNoria transaction on behalf of Cetelem, BNPP’s wholly owned consumer finance company, the largest in France. The e320 million deal proved popular with investors as French consumer-asset-backed paper is relatively rare. Each transaction out of Master Noria has priced tighter than the last.
Although BNP Paribas’ efforts to build an equities business outside France have proved on the whole fruitless, in its home market it still holds sway. Its business is split between straight equity transactions, such as that done in June 2002 for Vivendi Environnement to raise e1.5 billion and convertibles like the e264 million deal for Rallye in January and a follow-up e300 million transaction in April. BNPP also has a respectable presence in equity derivatives, despite the traditional predominance of rival French bank Société Générale
Though the French banks seem at first sight to have had the best year in M&A too, on closer inspection, much of their league table credit is for deals on which they advised themselves. BNP gets over e1 billion of recognition for its own accumulation of a 15% stake in Crédit Lyonnais, for example. Crédit Agricole uses the same trick to bump its credit up by e5.5 billion. But the real M&A star of the past year is Goldman Sachs. It worked with Crédit Lyonnais on its acquisition by Crédit Agricole – the largest European bank merger over that period. Goldman also used its knowledge of French regulation to guide Kingfisher through a hostile purchase that completed a takeover of Castorama, which was funded by a rights issue.
Though Goldman excels on the large transactions, Rothschild continues to play a dominant role in the French market, advising on more deals by number than any other bank, making it the preferred local partner. Companies inside and outside France turn to it for advice on complex transactions such as the buyout of Legrand by Kohlberg Kravis Roberts, after Schneider’s acquisition of its rival Legrand was blocked on competition grounds. Rothschild also used its experience of the UK market to help Vivendi acquire the 26% of Cegetel owned by BT. Its presence in the Crédit Agricole takeover of Crédit Lyonnais, when it advised the target, clearly demonstrates that Rothschild plays a pivotal role in French corporate finance.
