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It's time to throw caution to the wind

When Banque Nationale de Paris bought Paribas in 1999, sceptics said the combination would never work. Labelled a merger of equals, it was clearly a takeover by BNP of its smaller rival. In the aftermath of the deal, the bank lost large numbers of staff as doubters tired of the chaos and jumped ship. Two years and a creditable set of annual results on, it seems that they were wrong. But there's a huge hole in CEO Michel Pébereau's plan - investment banking. Time is running out for him to do something about it.

Three at the helm: Dominque Hoenn,
Michel Pébereau and Baudouin Prot (L to R)

On his first day at work in just-acquired Paribas, Banque Nationale de Paris CEO Michel Pébereau asked to see a list of every employee at the bank who earned more than £100,000. According to rumours, he was handed the internal telephone directory.

That was his second shock of the day. Earlier, as his car swept into the employee car park, Pébereau had been staggered to see so many Porsches, Lamborghinis and Jaguars and couldn't believe they belonged to his new staff. One head of department at Paribas famously owned 18 Ferraris - though presumably he only drove one of them at a time to work.

Paribas veterans readily admit that keeping tabs on expenses was never one of the bank's strong points. "Paribas was not really cost conscious," says Dominque Hoenn, chief operating officer of the merged institution and formerly in charge of asset and liability management and treasury management at Paribas.

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