Transaction banking acquisitions on the cards for BNP Paribas
(6 March 2017 – Europe) A senior executive at French bank BNP Paribas has said it would take over another cash management and trade finance business in Europe if the opportunity arose.
Jacques Levet, head of transaction services for Europe, Middle East and Asia, told the Financial Times that BNP had won the “lion’s share” of those RBS clients, who were offered a move to the French bank but were free to take their business to other banks.
“We’ve become a much better bank thanks to the integration of those RBS clients,” he said. “We had to ‘on-board’ in a very short period of time 1,200 new large corporates, [to do that] you have to improve and change your process, design and create new teams and really dedicate an organisation to that.”
“Should another bank retreat from its European operations in the future, I would be more than happy to do a deal like the one we did with RBS and I think we would be best placed to do it for sure,” Levet said, adding that while he believed there would be “a bit more” consolidation in the industry, he had no particular target in mind.
Transaction banking has been a steady earner throughout the financial crisis, with banks sharing a revenue pool of US$209 billion (A$277 billion) last year compare to the US$172 billion they made from fixed income and equities, and the US$77 billion earned from investment banking.
The sector faces challenges, including the threat from fintech, the heavy investment required in banks’ own technologies, and low interest rates across most of the world, which hurt banks holding cash balances for corporate clients.
John Gibbons, head of global transaction banking at Deutsche Bank, said regulation “may shake out certain players that don’t believe they have enough scale”.
“The market pressures are such on a global stage that they may drive consolidation,” he added.
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