View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
January 20, 2010updated 04 Apr 2017 1:12pm

BNP Paribas unveils strategic goals

Frances BNP Paribas looks set to emerge as a winner from the financial crisis after its acquisition of Fortis Bank enhanced its global reach Now, the bank has revealed strategic goals for its retail operations in the coming years, as it seeks to build on its status as the eurozones biggest bank by deposits

By Dan Jones

France’s BNP Paribas looks set to emerge as a winner from the financial crisis after its acquisition of Fortis Bank enhanced its global reach. Now, the bank has revealed strategic goals for its retail operations in the coming years, as it seeks to build on its status as the eurozone’s biggest bank by deposits. Dan Jones reports.

BNP Paribas (BNPP) has unveiled a comprehensive strategic plan for its newly-strengthened international operations as it looks to build on its already formidable market position across Europe and beyond.

BNPP, bolstered by the acquisition of Benelux-based Fortis, which made it the largest bank in the eurozone by deposits, believes its strong track record in integrating mergers over the past decade will serve it well over the next.

Though such claims have been widely and arguably inaccurately put forward within the banking industry over the past 18 months, BNPP has pointed to its recent successful integrations. This is most notable in its purchase of Italian unit BNL, which it said realised €550 million ($786 million) of synergies versus an initially-announced target of €400 million.

According to BNPP, synergies from the Fortis deal are expected to amount to €900 million by 2012, with €252 million of this figure expected to arise from improvements made across the bank’s retail banking networks in Belgium, Luxembourg, France, Italy and further afield. These adjustments will largely focus on “optimising networks and making best use of technology, such as CRM and card processing”.

Customer growth

The most obvious initial gains will be made in Belgium and Luxembourg, but the bank has work to do if it is to restore the tattered reputation of Fortis in its domestic markets.

A network of 2,900 branches and ATMs coupled with 1.3 million online banking users means BNPP is now, in its own words, “a leader across all distribution channels” in Belgium. However, a crucial facet of the new operation will be to reassure customers the bank is now both in safe hands and still to an extent “a Belgian bank”.

To this end, BNPP has committed to keeping key decision centres in Belgium, as well as its more visible branding commitment of taking the name ‘BNP Paribas Fortis’.



The importance of a name

During the rebranding in June last year, BNP Paribas Fortis head of marketing for retail banking, Franciska Decuypere, told RBI: “I think there is a very important message in keeping the Fortis name. We thought about it and it would have been easy to say simply go with BNP Paribas.

“It is a sign of respect from BNPP to the local Belgian market, to the company and to its people to keep Fortis and there are strengths to take from both banks,” Decuypere added (see RBI 615).

But the bank also has ambitious plans for its other markets.

Talking to RBI in late December, Peter Vanderkerckhove, head of retail and private banking (Belgium) at BNPP, said: “I think it is important to look at what BNPP is able to do in its organisation. Because it has a very large platform it was able to split national operations from international operations and still keep enough of the knowledge coming through.”

‘Optimising networks’, as the bank termed it at an investor day in December last year, will take on a number of distinct forms. In Poland, the process will involve combining the bank’s retail banking businesses into one integrated unit.

Peter Vanderckhove, BNPP

Having merged its Dominet Bank holding with Fortis Bank Poland into one universal bank in August 2009 – the two businesses have 259 branches and 400,000 customers between them – BNPP plans to launch a new personal financial business from within its retail bank, as well as deliver €25 million in synergies by 2010.

The process is reminiscent of the complicated reorganisations of Polish operations being performed by European banks at either end of the performance spectrum.

Belgium’s KBC, for example, announced on 4 January that its Polish subsidiary, Kredyt Bank, is to transfer its consumer finance unit Zagiel to KBC as a precursor to a divestment of the unit.

The bank’s aim is to move “away from the stand-alone specialist model… and towards an integrated bancassurance distribution model”. This will involve selling consumer finance products via Kredyt Bank.

In November, meanwhile, Spain’s Santander gained approval to purchase AIG’s retail banking business in Poland, which it plans to integrate with its own consumer finance operations to create a 250-outlet unified consumer finance division.

But for BNPP, the process extends further than just Poland. A new emerging markets unit will comprise the bank’s activities in Central and Eastern Europe, the Mediterranean and Turkey.

According to Vanderkerckhove, from a customer’s point of view, the move represents an attempt to “avoid the fractures in the service”.

Of particular importance to Vanderkerckhove, given his twin responsibilities, is ensuring “the necessary time is allocated to each client”.

Market Share

BNP Paribas domestic markets, September 2009


Retail clients/entrepreneurs (m)

Private clients

Personal finance clients (m)

















Source: BNP Paribas

He continued: “That way you can transport him from the smaller segments, from retail into private banking – you can really have a sliding scale where the client feels much closer guarded and does not feel fractured each time he changes service.”

The acquisition of Fortis Bank not only gives BNPP an even firmer footprint in Western Europe, but also provides it with numerous opportunities further afield, as the bank’s new geographic segmentation policies imply.

In Turkey, for example, the combination of Fortis Bank’s local subsidiary and TEB-BNP Paribas raises its share of the retail loan market from 1.4 percent to 3.8 percent, while its branch network has increased from 330 to 500.

BNPP also recently signed an ambitious deal with merchant processor First Data to create a new network of 1,250 ATMs at retail locations across Turkey. 

But while roll-out of a more integrated business will take time in the bank’s emerging markets, in what BNPP terms its four domestic markets – Belgium, France, Italy and Luxembourg – a “full deployment of the integrated model” is either now taking place (Belgium and Luxembourg) or already exists (France and Italy).

According to the bank, the single multichannel model in place in France and Italy now covers 10 million households across the two countries, with bank-initiated contacts having increased by five times in Italy since 2007 and by eight times in France by 200.

Establishing such contacts via the multichannel model involves a mixture of personalised internet messages, calls from customer relationship centres, mail shots and branch contacts.

BNPP expects to have implemented this model in Belgium and Luxembourg by 2011.While this is expected to cost €60 million in Belgium alone, this is far short of the €150 million the bank invested in implementing the model in France, a fact not just down to geographic factors.

The rollout cost per emerging market retail network is expected to total no more than €10 million per country, with Ukraine (2009-10) and Morocco (2010-11) next on the agenda.

The bank also has ambitious plans for its card processing unit, intending to bring more functionality in-house over the next few years.

At present the bank currently has 66 percent of its processing platforms in-house, spread across 24 separate systems, but by 2016 it envisages some 90 percent of its card processing will be done internally – and on a single integrated platform.

Though BNPP’s strategy document largely focused on the integration of the former Fortis businesses, the bank also intends to cement its position as a market leader in both France and Italy through separate ventures.

In France, where the bank also has to integrate a Fortis business which includes 50,000 retail banking customers, a key initiative will be the upgrading of direct channels as part of a push to become the country’s best online bank by 2012.

In Italy, BNL will concentrate on an altogether less fashionable channel, in Western European terms at least: the branch. Between 50 and 70 branches will be opened each year until 2012 as BNL looks to reach a total of 1,000 branches by that date.


As well as Fortis Italy, BNPP also has to integrate Findomestic, having agreed to buy out half of Intesa Sanpaolo’s 50 percent stake in the consumer credit company joint venture in August 2009.

Consumer credit remains a key pillar of the bank’s strategy, though outside of the eurozone personal finance subsidiaries will be merged into retail banks. Within the eurozone, the bank’s capabilities are geared towards expansion, and further gains in market share are anticipated as a result of the scaling back of the likes of Citigroup’s European consumer finance operations.

Further, BNPP has deepened its consumer finance footprint in a number of markets of late.

These include Portugal, where the bank took control of affinity group LaSer’s subsidiary Credifin in 2008 with a view to becoming the number one player in the market; Belgium, where BNPP now has access to 3.2 million customers; and Germany, where BNPP has evolved its joint venture partnership with Dresdner to take account of the German bank’s acquisition by rival Commerzbank in 2008. That venture gives BNPP access to some 11 million Germany consumer finance customers.

Product innovation is also on the agenda, particularly within the mortgages segment, where the bank intends to leverage variable rates as well as encourage cross-border transactions.

Indeed, BNPP’s truly international scope is seen as a key differentiator by Vanderkerckhove.

“What we can offer to the [Belgian] client in depth of geographies and products is much larger. This is a major shift in terms of customer satisfaction,” he said.


NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A weekly roundup of the latest news and analysis, sent every Wednesday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy


Thank you for subscribing to Retail Banker International