In the aftermath of the First World War, Luxembourg experienced a vigorous economic revival and significant investments were needed for its industry, which is fertile soil for the expansion of banking business. It was against this backdrop, in 1919, that the Banque Générale du Luxembourg (BGL) saw the light 100 years ago.
Belgian roots
To take advantage of the possibilities offered by a likely customs union between the Grand Duchy of Luxembourg and Belgium, the Société générale de Belgique on 29 September 1919 formed the Banque Générale du Luxembourg, an institution governed by Belgian law with administrative headquarters in Luxembourg. The bank’s nerve centre remained in Belgium.
Photo: BGL in the 1920s.
1919-1931: rapid expansion
Right from the start, BGL led an expansionist banking policy and opened branches in the Grand Duchy and Lorraine (Metz and Thionville), up to the German border regions. These regional offices were in line with the network development strategy of the Société Générale de Belgique, which simultaneously continued to open branches in Belgium.
In 1931, it had 16 branch offices in the Grand Duchy and 7 in Belgian Luxembourg. At the same time, it consolidated its position in the Luxembourg steel industry and railways through a series of acquisitions and bank restructuring operations.
BGL headquarters at the corner of Aldringen Street and Monterey Avenue, around 1933.
1935-1955: strengthening its entrenchment in the country
In 1935, following the devaluation of the Belgian franc, BGL became a company under Luxembourg law and a subsidiary of Société Générale de Belgique as major shareholder in the institution. Its Luxembourg-based branches were abandoned. The restructuring culminated with the founding in November 1935 of the Compagnie foncière et hypothécaire du Luxembourg (Cofhylux), a property and financial company. The registered head office moved from Arlon to Luxembourg in 1935.
During the Second World War, banking business slowed down. By decision of the German occupation, many branches were closed. Half of the bank’s shares that were held by the Société Générale de Belgique were assigned to Deutsche Bank.
After the War, the Société Générale de Belgique Group bought these shares back and redeployed an intense banking activity geared towards Luxembourg’s economy and customer acquisition. In 1955, BGL set up its second subsidiary, Crédit général du Luxembourg, which specialised in the incorporation, management and administration of holding companies.
1969 till the 1980s: going global
The globalisation of financial markets in 1969 favoured the opening of a trading floor that enabled the bank to extend its role on the Euro bonds market and develop abroad. The bank for instance opened representative offices in Milan and Mexico City in 1979, and in Hong Kong in 1980. In August 1982, it expanded its network by founding the Banque générale du Luxembourg (Suisse) S.A. In Zurich. To increase its shareholder base, BGL entered the Luxembourg Stock Exchange in November 1984.
By the end of the 90s, BGL was a universal bank. It offered its customers commercial bank services while maintaining its presence in investment banking and international financial services.
1999-2008: the Fortis years
In 1999, Groupe Fortis bought Société Générale de Belgique (which had become Générale de Banque) and thus became the majority shareholder of BGL. In 2000, following a takeover bid by Fortis for all of the bank’s outstanding shares, the group increased its interest in BGL’s existing capital to 97.73%. In 2005, the bank became Fortis Banque Luxembourg.
During the financial crisis in September 2008, the Luxembourg government invested EUR 2.5 billion in Fortis Bank Luxembourg in the form of a convertible loan note. In December 2008, it became a 49.9% shareholder in Fortis Banque Luxembourg by converting the granted loan into equity.
2009 till today: joining the BNP Paribas Group
In May 2009, the BNP Paribas Group became the majority shareholder of BGL with 65.96% of its capital; on 21 September 2009, BGL was renamed to BGL BNP Paribas. It is one of the Group’s four major domestic markets in Europe. In February 2010, BNP Paribas became sole owner of its subsidiary. The activities of BNP Paribas Luxembourg S.A. were transferred to the technical and operational platforms of BGL BNP Paribas at the end of October that year.In 2018, BGL BNP Paribas bought all the shares of ABN Amro Bank (Luxembourg) S.A. This enabled the Group to strengthen its position in the private banking and insurance sector in Luxembourg.
BGL BNP Paribas today has 3,700 employees, all of them based in Kirchberg. The former Kronos head office built in 1995 has been expanded with new buildings that went up between 2013 and 2016 to form a new banking centre. A century after it was founded, BGL thus confirms the BNP Paribas Group’s solid anchorage in the economy of Luxembourg.
BNP Paribas in Luxembourg
www.bnpparibas.luIn Luxembourg, the BNP Paribas Group has established itself as one of the leading banks in the financial market, successfully combining local expertise with strong international leverage.
Discover