Going all in: BNP Paribas bets on Exane buyout to complete its CIB vision
In buying out its Exane equities joint venture partner, BNP Paribas reckons it can make a success of a business where few European peers have thrived. It also hopes to see a halo effect on underperforming franchises like ECM.
When Yann Gérardin was toiling away on the fringes of the dealing room at pre-merger Banque Nationale de Paris, putting together an equity derivatives desk in the late 1980s, the prospect of being able to deploy a full-service equities franchise must have seemed far away. But now, as deputy chief operating officer of BNP Paribas and head of its corporate and institutional bank, he is about to preside over a radical change that he thinks will transform how the firm transacts with its equities clients.
In its full-year earnings for 2020, BNPP said it would “accelerate the development of its equity businesses with the roll-out of a broader prime services offering and the strengthening of cooperation with Exane BNP Paribas”. Now the bank has revealed just what that means. On March 11 it announced that it would buy out the half of its equities partnership with Exane that it does not already own for an undisclosed sum.
In doing so the bank is bringing to an end an arrangement that was first mooted in late 2003 and formally launched in April 2004. But the move also marks a vote of confidence by the bank in its ability to make a full-service equities franchise work at a time when European investment banks are struggling to justify the effort involved.