Western Europe’s best investment bank 2022: BNP Paribas
While it has been a leader for many years in European debt and loan financing, BNP Paribas has in recent years built out its secondary markets businesses. It now includes a full service offering in equities as well as fixed income currencies and commodities (FICC) across research, secondary markets, prime services, derivatives and capital markets.
This reached a new stage in July 2021 when the bank completed the deal to acquire 100% of Exane BNP after a 17-year partnership with the European equities broker and research house.
“We have high hopes for the interconnection between cash equities, prime finance and equity derivatives,” Yann Gérardin, chief operating officer and head of corporate and institutional banking at BNP Paribas, told Euromoney about that deal, the bank having long been a force in equity derivatives.
In November 2021, it signed an agreement with Credit Suisse to take on its clients after the Swiss bank exited prime services. That arrangement recalls a similar referral agreement with Deutsche Bank, dating back to 2019, to transfer clients, systems and key staff in prime services and electronic execution, which BNP Paribas completed in 2021.
As European rivals selectively withdraw, the French bank stepped up.
In 2021, its combined FICC trading and equity markets revenues kept pace with the astonishing turnover in the first year of Covid and came in 22% ahead of 2019. For the first quarter of 2022, markets revenues were 46% higher, based on constant exchange rates, than in the first quarter of 2021. There was a 60% increase in equities and prime services, which came from the increase in market share. The bank managed to keep value at risk low despite high market volatility.
As well as an enhanced global markets business, BNPP now adds greater equity capital markets capability than in years past, although this may bring less revenue as markets fall in expectation of rising rates. It has also broken into the top 10 in M&A for the region, ranking seventh for the 12 months under review, close behind European rival Rothschild and the big US banks.
We have high hopes for the interconnection between cash equities, prime finance and equity derivatives
That is an important benchmark after a record year for M&A volumes. BNPP jumped six places in the M&A league tables, which do not normally see such moves. It worked on 123 transactions including 11 of the 30 largest announced and grew M&A revenues by 70% over the two years from 2019 to 2021.
In Germany, it advised Daimler on the €29 billion spin off of Daimler Truck. In France, it advised Veolia on the €20 billion acquisition of Suez and disposal of certain assets to create a global competitor in ecological transformation. In Spain, it advised MasMovil on a €20 billion joint venture deal with Orange to create the number-two telecoms operator. And, reflecting its financing strength, it advised Clayton Dubilier & Rice on the £10 billion leveraged buyout of UK supermarket chain Morrisons.