Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
  1. Homepage
  2. Equities
  3. France
  4. Euronext Paris
  5. BNP Paribas
  6. News
  7. Summary
    BNP   FR0000131104


SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Analysis - BNP Paribas takes a second swing at Asia growth plan

03/07/2013 | 06:39pm EDT
File photo of the BNP Paribas plaque seen on the roof of one of their main banks in central Paris

HONG KONG/PARIS (Reuters) - BNP Paribas's second attempt since 2010 to expand in Asia is a bold move by the bank, as it plans a big hiring push at a time when many Western banks in the region are still scaling back.

BNP's Asia revamp is the first sign this year of a broad regional, investment banking growth plan in a part of the world where revenues in the sector have dropped and costs have risen. While other banks are selectively growing certain investment banking or trading units amid broader cuts, BNP's ambitious plan to hire 1,300 bankers over three years in Asia is the most eye-catching move yet.

But in a change from its traditional business model in Asia -- partly forced upon it by regulatory pressure at home -- the bank plans less big corporate lending against its own balance sheet and more indirect financing and advisory work.

That could be difficult, say some analysts, in a region where corporate clients expect their banks to "pay to play".

"If BNP is thinking they are going to get those ancillary businesses without providing the loans, that's wishful thinking," said Ismael Pili, head of financials research for Asia at Macquarie Securities.

The damage inflicted on balance sheets by the eurozone crisis prompted BNP, like its peers, to withdraw parts of its business from Asia in 2011, offloading billions of dollars of loans to other banks in a painful bout of "de-leveraging".

Now, supported by a stronger capital base than its domestic rivals, BNP hopes to build on its traditional strength in trade finance and fixed income and derivatives in Asia whilst others remain hunkered down in Europe.

"We have completed the adaptation process and we're out of the blocks ahead of most of our competitors," said Eric Raynaud, CEO of Asia Pacific, in an emailed response to Reuters.

Those competitors will be closely watching to see how France's biggest listed bank fares against lenders from Japan, Singapore and China who were quick to step into the gap left by European banks and are likely to defend their new turf fiercely.


BNP plans to grow in most business units in China and Indonesia and will invest in its regional hubs Hong Kong and Singapore. It is ramping up in trade finance, interest rate and commodity hedging, private banking and insurance, Raynaud said, adding that it planned to expand its corporate lending book by more than 50 percent in Asia.

It's a gutsy strategy for a bank seeking to regain its footing in a high growth region, and one some critics believe may be too ambitious.

"There is still a lot of local competition...It's not in the bag for BNP," said Philippe Bodereau, managing director at London-based Pacific Investment Management Co., the world's largest bond investor.

After beefing up its Asia loans team last year, the bank said in its quarterly report in February that it wanted to add more than 1,000 employees in the region over three years in its investment solutions and corporate investment banking divisions.

The two divisions, which include wealth management, fixed income and insurance, already have 8,000 employees -- a big team by Asia investment banking standards. The bank wants to increase annual revenues from these businesses to more than 3 billion euros by 2016 from 2 billion now.


Investors so far seem to be supportive of BNP's latest Asia plan, at a time when growth is slowing in Europe, though concern is surfacing about the tough competition posed by local banks and the cost of expansion.

"For European investors, revenue plans don't tell you anything. They don't tell you about what it will cost," said Nick Davey, an analyst at UBS in London, who has a neutral rating on the stock. "Geographically, Asia makes a lot of sense but I can understand why the shares have not responded more enthusiastically."

The bank did not detail the cost of expansion. Its shares have fallen around 5.4 percent since the announcement, though the dip is associated more with the economic weakness in the eurozone. Societe Generale is down 6.2 percent and Credit Agricole fell 3.5 percent in the period.

According to a senior executive based in Hong Kong, the bank aims to double revenues from insurance over the next 5 years and sees growth potential in debt capital markets, with a focus in greater China. The bank also expects to garner fees from foreign exchange transactions, particularly in China's currency.

"We want to be cash rich. Our strategy is to have more and more indirect financing, less balance sheet exposures," the executive told Reuters.

Another senior executive said the bank does not plan to return to its corporate lending business on the scale it was operating on three years ago. The executives were not authorised to speak on the record.


One challenge that BNP faces with its Asia plan is winning back clients' confidence following its retreat, at a time when investment banking revenues in the region are shrinking.

Royal Bank of Scotland and Barclays are among the European banks that pared down in Asia in the last year. Credit Agricole and SocGen have also been scaling back.

The February announcement is not BNP's first Asia comeback effort. It had rolled out a regional growth plan in December 2010, aiming to more than double revenues within three years.

One year into the plan, the bank was in retreat mode, hit by the eurozone crisis. In 2012, it dropped down the Asia mandated loan bookrunner league table standings (excluding Japan) to 22nd from 11th in 2010, Thomson Reuters LPC data shows.

Mizuho Corporate Bank <MZFGAE.UL>, Sumitomo Mitsui Banking Corp, OCBC Bank, HangSeng Bank and UOB were among the lenders that replaced Western banks.

Standard Chartered and HSBC and Chinese banks also took on the market share that was left behind, stepping up loan syndication, trade finance and cash management -- profitable segments that BNP is now eyeing.

BNP aims to climb back to the top 10 in lending, said one of the sources.

"Our operations in Asia Pacific have always been sustainable and profitable and obviously our plan is to continue to grow a profitable and self-funded business," Raynaud said. "We are back to business and ready for growth."

(Additional reporting by Stephen Aldred and Lawrence White; Editing by Michael Flaherty and Alex Richardson)

By Swati Pandey and Lionel Laurent

ę Reuters 2013
Stocks mentioned in the article
ChangeLast1st jan.
AIMING INC. 0.86% 351 End-of-day quote.-16.03%
BARCLAYS PLC 1.76% 197.82 Delayed Quote.34.87%
BASE CO., LTD. 4.44% 4705 End-of-day quote.-23.50%
BASE, INC. 5.61% 1186 End-of-day quote.-39.24%
BNP PARIBAS 1.98% 57.75 Real-time Quote.33.98%
CITIGROUP INC. 2.10% 72.29 Delayed Quote.17.24%
CRÉDIT AGRICOLE S.A. 2.07% 12.848 Real-time Quote.24.50%
DEUTSCHE BANK AG 3.16% 11.412 Delayed Quote.27.52%
HANG SENG 1.38% 25288.76 Real-time Quote.-7.13%
HSBC HOLDINGS PLC 1.92% 434.2 Delayed Quote.14.61%
MITSUI & CO., LTD. 1.19% 2592 End-of-day quote.37.18%
NATWEST GROUP PLC 1.92% 233.9 Delayed Quote.39.52%
OVERSEA-CHINESE BANKING CORPORATION LIMITED -0.08% 11.87 End-of-day quote.17.99%
SOCIÉTÉ GÉNÉRALE 1.77% 28.79 Real-time Quote.69.13%
STANDARD CHARTERED PLC 1.46% 492.5 Delayed Quote.5.71%
SUMITOMO MITSUI FINANCIAL GROUP, INC. 1.63% 3867 End-of-day quote.21.30%
TEAM, INC. -3.86% 2.74 Delayed Quote.-74.86%
THE COMMERCIAL BANK (P.S.Q.C.) -0.69% 6.08 End-of-day quote.38.18%
UNITED OVERSEAS BANK LIMITED 0.41% 26.71 End-of-day quote.18.24%
All news about BNP PARIBAS
10/15BNP PARIBAS : Goldman Sachs reiterates its Buy rating
10/15DONGFENG MOTOR : to Issue Nearly $842 Million of Euro-Denominated Bonds to Pay Debts; Shar..
10/14UniCredit, Amundi Among Sponsors Of Italy's First Private Equity Fund For Retail Invest..
10/14BNP PARIBAS : European Commission Approves BNP Paribas, CDC's Purchase of Immobilière de l..
10/14BNP PARIBAS : recognized by EcoVadis and FTSE4Good extra-financial ratings
10/14Advent plans London listing for Rubix
10/14British Industrial Maintenance Firm Rubix Maps Out London Float
10/14WAGA ENERGY : Waga Energy annonce le lancement de -12-
10/14WAGA ENERGY : Waga Energy announces the launch of -2-
10/13EPR PROPERTIES : Prices $400 Million Senior Notes Offering
More news
Analyst Recommendations on BNP PARIBAS
More recommendations
Sales 2021 46 065 M 53 436 M 53 436 M
Net income 2021 8 463 M 9 817 M 9 817 M
Net Debt 2021 - - -
P/E ratio 2021 8,90x
Yield 2021 6,22%
Capitalization 72 134 M 83 682 M 83 676 M
Capi. / Sales 2021 1,57x
Capi. / Sales 2022 1,55x
Nbr of Employees 193 319
Free-Float 86,9%
Duration : Period :
BNP Paribas Technical Analysis Chart | BNP | FR0000131104 | MarketScreener
Technical analysis trends BNP PARIBAS
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus BUY
Number of Analysts 23
Last Close Price 57,75 €
Average target price 63,24 €
Spread / Average Target 9,51%
EPS Revisions
Managers and Directors
Jean-Laurent BonnafÚ Chief Executive Officer & Director
Jean Lemierre Chairman
Bernard Gavgani Chief Information Officer
Yann GÚrardin Chief Operating Officer
Nathalie Hartmann Head-Compliance
Sector and Competitors
1st jan.Capi. (M$)
BNP PARIBAS33.98%83 682
JPMORGAN CHASE & CO.28.65%492 383
WELLS FARGO & COMPANY60.30%193 371