Who is BNP Paribas?

BNP Paribas is a French multinational financial institution which is the result of various French and international mergers. The banking institution was established in 2000 through the merger of Banque Nationale de Paris (abbreviated as BNP, meaning “National Bank of Paris”) and Paribas, which was formerly known as Banque de Paris et des Pays-Bas.

Foundation

In 1999, BNP tried to buy Société Générale and Paribas, while Société Générale tried to buy Paribas. BNP’s bid for Société Générale failed, but its bid for Paribas succeeded leading to a merger of BNP and Paribas one year later. In 2006, BNP Paribas bought Banca Nazionale del Lavoro (BNL), which was Italy’s sixth-largest bank.

In 2008, BNP took over 75% of Fortis’ activities in Belgium, and 66% in Luxembourg, in exchange for the Belgian government becoming the BNP Group’s major shareholder. In the end, the Belgian government and BNP negotiated for a 75% partnership in Fortis Bank Belgium. BNP Paribas renamed the new subsidiary BNP Paribas Fortis.

In 2009, BNP Paribas became the majority shareholder of BGL (formerly known as Fortis Bank Luxembourg), with the State of Luxembourg retaining 34%. BNP became the Eurozone’s largest bank by deposits held.

The bank changed to BGL BNP Paribas and in February 2010, BGL BNP Paribas became the sole owner of BNP Paribas Luxembourg.

In 2014, BNP Paribas acquired Rabobank’s Polish unit BGZ Bank for around $1.3 billion.

In December 2021, BNP Paribas announced that it would sell Bank of the West to the Bank of Montreal for $16.3bn. Following many European banks who have retreated from the US after struggling to compete with big domestic lenders such as JPMorgan Chase, Bank of America and Wells Fargo, BNP Paribas decided to exit the US retail market.

The 9  largest banking group worldwide

BNP Paribas is publicly traded on the Euronext Paris exchange and is included as a constituent of the Euro Stoxx 50 stock market index. BNP Paribas is the largest banking group in Europe and the ninth-largest banking group worldwide in terms of total assets. Following the 2008 financial crisis, the bank gained notoriety as one of the top five global banks. It holds the 33  position in the Forbes Global 2000 rankings as one of the largest publicly traded companies globally.

US fine regarding messaging violations

In 2023, after a swath of fines across Wall Street, BNP Paribas faced US regulatory sanctions regarding its record-keeping of its employees’ electronic message communications.The Eurozone’s biggest bank by market value said that it had reached a proposed resolution with the Securities and Exchange Commission and the Commodity Futures Trading Commission enforcement divisions. The bank was investigated by regulators over its records linked to the “use of unapproved electronic messaging platforms for business communications.”

BNP is the latest bank to be connected to the messaging probes across the banking industry after investigations started last year. The probe has to do with the unauthorised use of encrypted messaging services such as WhatsApp and Signal. Britain’s HSBC fired a trader last year for using these messaging services inappropriately and paid a total of $45mn to the SEC and CFTC this year. Goldman Sachs, Morgan Stanley and Barclays also had to collectively pay more than $1.8bn in fines last year.

With the guidance of its chief executive Jean-Laurent Bonnafé, BNP has tried to position itself as Europe’s main corporate and investment bank.

Revenue and earnings

Like Wall Street banks, the French bank had a mixed quarter in its corporate and investment bank, posting a 2.3% fall in revenues. Earnings were weaker in its markets business, with a 18% drop in fixed-income, commodities and currencies revenues. Goldman Sachs and Morgan Stanley also had experienced difficult quarters, but BNP’s fall was steeper than the average 12% drop by its US competitors.

In bond issuance it performed better, and the performance of its global banking unit had a much stronger performance.

The bank is targeting higher revenues and more profitability, and it has reinvested some of the profits from its $16.3bn sale of Bank of the West. Part of the funds are going to share buybacks. BNP’s return on tangible equity increased to 13.6% in the second quarter, reaching its goal of more than above 12% to 2025.

Latest news

The latest news from BNP Paribas has to do with the appointment of Scott Carter as global head of investor coverage.  The appointment will help to provide better investor coverage and to explore growing and changing market opportunities.

Carter was partner and head of trading and portfolio financing at AQR Capital Management. He led AQR’s global trading team and portfolio finance effort, with a focus on the trade execution, financing, clearing and cash management of AQR’s funds and supervised the firm’s counterparty relationships. He had also worked for 20 years at Deutsche Bank in various senior positions.

José Placido, Chief Executive Officer of BNP Paribas USA and CIB Americas, said: “Today’s appointment capitalises on the significant progress we’ve made since the inception of the Investor Coverage team, and is the natural progression in the space, further deepening our connections and relevancy with investors in the US and globally.”

Sandrine Ferdane, global head of financial institutions coverage (FIC) at BNP Paribas, said: “Our ambition is to become the leading European bank to institutional clients and support the whole economy during the low carbon transition. BNP Paribas is well-positioned to provide comprehensive investor solutions that meet the evolving needs of institutional investors worldwide. We welcome Scott to our management team and look forward to continuing working closely with all our investor clients together with our senior bankers in the US, EMEA, and APAC.”

Sustainability projects

BNP Paribas SA has been also involved in sustainability projects, including its combined efforts with Citigroup Inc., HSBC Holdings Plc, Societe Generale SA, Rothschild & Co., and Standard Chartered Plc to help finance a new $15 billion program to protect Indian ocean habitats.

The banks have discussed funding possibilities in the form of bonds and so-called debt-for-nature swaps. The swaps will allow sovereign issuers to refinance existing debt in exchange for nature conservation guarantees. The first recipients are likely to be Kenya, Tanzania and Mozambique. The initiative will help protect 30% of the ocean area across the involved nations, restore biodiversity, sequester at least 100 million tons of carbon by 2030, and develop a green ocean-based economy for 70 million people living in coastal communities.

سلب مسئولیت:

This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked, in this communication.