Who is BNP Paribas?

BNP Paribas is a French multinational financial institution created through a series of French and international mergers. Its current structure emerged in 2000 when Banque Nationale de Paris (BNP), the National Bank of Paris, merged with Paribas, formerly known as Banque de Paris et des Pays-Bas.

Foundation

In 1999, BNP attempted to acquire both Société Générale and Paribas, while Société Générale also targeted Paribas. Although BNP failed to buy Société Générale, it succeeded in acquiring Paribas. One year later, the two institutions merged. In 2006, the group expanded again by purchasing Banca Nazionale del Lavoro (BNL), then Italy’s sixth-largest bank.

In 2008, the bank acquired 75% of Fortis’ operations in Belgium and 66% in Luxembourg. As part of the deal, the Belgian government became the major shareholder of the BNP Group. The two sides later agreed on a 75% partnership in Fortis Bank Belgium. The newly integrated subsidiary was renamed BNP Paribas Fortis.

In 2009, BNP Paribas took majority control of BGL, previously known as Fortis Bank Luxembourg, while the State of Luxembourg kept a 34% share. That year, BNP also became the Eurozone’s largest bank by total deposits.

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 the sale of Bank of the West to the Bank of Montreal for $16.3 billion. The decision followed a broader trend of European banks pulling back from the United States after struggling to compete with major domestic lenders like JPMorgan Chase, Bank of America, and Wells Fargo. As part of this shift, BNP Paribas chose to exit the U.S. retail market.

BNP Paribas The 9^th 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. The bank 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^rd 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 wave of fines across Wall Street, BNP Paribas faced U.S. regulatory sanctions for failing to properly record its employees’ electronic communications. The Eurozone’s biggest bank by market value said it had reached a proposed resolution with the enforcement divisions of the Securities and Exchange Commission and the Commodity Futures Trading Commission. Regulators had investigated the bank for records tied to employees’ use of “unapproved electronic messaging platforms for business communications.”

BNP is the latest bank linked to the industry-wide messaging probes that began last year. The investigation focuses on the unauthorized use of encrypted messaging services such as WhatsApp and Signal. Britain’s HSBC fired a trader last year for using these services improperly and later paid a total of $45 million to the SEC and CFTC. Goldman Sachs, Morgan Stanley, and Barclays also paid more than $1.8 billion in combined fines during the same period.

Under the leadership of chief executive Jean-Laurent Bonnafé, BNP has worked to position itself as Europe’s leading corporate and investment bank.

Revenue and earnings

Like many Wall Street banks, BNP reported a mixed quarter in its corporate and investment division, with revenues falling 2.3%. Its markets business performed even worse, posting an 18% drop in fixed-income, commodities, and currencies revenues. Goldman Sachs and Morgan Stanley also faced weak quarters, but BNP’s decline was sharper than the average 12% drop reported by its U.S. competitors.

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

The bank aims to increase both revenue and profitability, and it has reinvested part of the profits from its $16.3 billion sale of Bank of the West. Some of the funds are being used for share buybacks. BNP’s return on tangible equity rose to 13.6% in the second quarter, meeting its goal of staying above 12% through 2025.

Latest news for BNP Paribas

BNP Paribas’ latest news involves the appointment of Scott Carter as its global head of investor coverage. The bank expects this move to strengthen investor support and help it pursue new and evolving market opportunities.

Carter previously served as partner and head of trading and portfolio financing at AQR Capital Management. He led AQR’s global trading team and oversaw its portfolio finance operations, focusing on trade execution, financing, clearing, and cash management for the firm’s funds. He also supervised AQR’s counterparty relationships. Before that, he spent 20 years at Deutsche Bank in several senior roles.

José Placido, CEO of BNP Paribas USA and CIB Americas, said the appointment builds on the progress made since the Investor Coverage team was created. He added that it marks a natural next step for the bank. The move will strengthen BNP Paribas’ relevance and relationships with investors in the US and around the world.

Sandrine Ferdane, global head of financial institutions coverage at BNP Paribas, said the bank aims to become the leading European institution for institutional clients. She noted that BNP Paribas plans to support the wider economy through the low-carbon transition. She also said the bank is well positioned to offer investor solutions that match the changing needs of clients worldwide. Ferdane welcomed Scott to the management team and looks forward to working with investor clients and senior bankers across the US, EMEA, and APAC.

Sustainability projects

BNP Paribas SA has also taken part in several sustainability projects. The bank worked with Citigroup, HSBC, Société Générale, Rothschild & Co., and Standard Chartered to help finance a new $15 billion program aimed at protecting 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.

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