The BNP Paribas Group in Germany, today and tomorrow
08.08.2013 | Group
Overview of the Group in Germany
The BNP Paribas Group has been present in Germany since 1947 and operates through 12 business lines across 14 site locations. Throughout the different economic cycles, BNP Paribas has always remained loyal to this country. It currently employs 3,500 people in Germany, spanning its three activities - Corporate & Investment Banking, Investment Solutions, and Retail Banking - which generate equal banking revenue. The Group offers all the services of a large universal bank.
As part of the “One Bank for Corporates in Europe and Beyond” strategy, CIB in Germany - long established within the large corporates segment – is currently expanding in the large exporting midcaps segment.
Investment Solutions is active through its Insurance, Securities Services, Real Estate, Investment Partners and Wealth Management business lines. Certain of these, such as Real Estate and Securities Services, have gradually acquired leadership positions in their respective markets or have recently strengthened their positions through external acquisitions (e.g. Imoplan and Commerzbank's depositary activity).
Retail Banking services are distributed via Cortal Consors and the Personal Finance, Leasing Solutions, Factor and Arval business lines. Another channel is Hello bank! Germany, the online banking label for individual clients launched on 17 May by Cortal Consors, which is already a recognised leader in online investments. The consumer lending activity is principally carried out via joint ventures with Commerzbank as well as Von Essen Bank.
BNP Paribas in Germany holds solid positions in specialised areas: Leasing Solutions (farm equipment and vendor programmes), Commerz Finanz (consumer finance and retail credit), and Cardif (credit protection insurance distributed via partnerships with third-party banks, etc.). Cash Management is also posting noticeable growth.
BNP Paribas is the only foreign bank to offer such a wide variety of activities. On this solid base it plans to leverage its growth potential and positioning, in keeping with the Group's European strategy. To do this, it will draw on all the competitive advantages of BNP Paribas as the leading bank in the Eurozone with a vast international network.
Objectives of the 2013-2016 development plan
The Group's main objective is to build a real commercial franchise in Germany and to be recognised by its clients as a bank of reference, both within its business lines and at the Group level.
Leadership positions in securities services, real-estate services and consumer lending will be strengthened. Cardif will continue to diversify its range of products and its distribution channels, such as Hello bank!, the digital distribution channel.
The transformation phase is twofold:
i) The target of Hello bank!, the digital intitiative by Cortal Consors for individuals, is to reach 1.1 million clients by 2017 in order to ramp up deposit-gathering while preserving the online brokerage business.
ii) This new liquidity will allow CIB to expand its commercial coverage to exporting midcap clients with sales in excess of €250 million.
The bank will also reinforce the relations with corporates (e.g. Investment Banking Europe, IBE), by developing in particular the advisory and capital-market activities. CIB aims to be in the top 5 in the market for corporates in Germany. Enhanced cross-selling with CIB should help to grow the leasing business by 50% while Factor should double its market share.
The target of BNP Paribas in Germany is to grow revenues from €1.1 billion to €1.5 billion by 2016, or a compound annual growth rate of 8%. This is an ambitious target in view of the extremely mature market, so the intrinsic growth rate will be lower.
Measures underway to meet development goals
Each business line developed its own industrial plan for 2013-2016, all of which were then coordinated by the Management Board in Germany at the national level. They now form a central part of the development plan for Germany.
In addition, transversal initiatives have been launched. The top priority is to encourage cross-selling and cross-referrals on a systematic basis in order to build real commercial cooperation between the business lines in Germany. In this highly decentralised market, the BNP Paribas Group will reinforce its network by opening new business centres, which regroup all high-potential commercial teams in the Länder. In terms of liquidity management, activity has been reorganised according to geography, in order to be consistent with local pricing conditions for deposits and loans, and to optimise the offer in compliance with local regulatory constraints.
Finally, the unity and cooperation of the German teams is central to the plan's success. The new governance through a Management Board in Germany, comprised of the head of each business line, is the first major step in this direction. The plan is also to draw more on the expertise of the Group's 190,000 employees by highlighting its comparative advantage, i.e. the international network and solid banking expertise in numerous businesses of the BNP Paribas Group.
This plan is an ambitious one, requiring an investment. In the framework of the Group's Simple & Efficient plan, the aim is to increase local efficiency by creating cross-business synergies across the country. This project is expected to start producing tangible results in 2014.
Several hundred new recruits will be hired in the period leading up to 2016, which will help to diversify the Group's scope of expertise in the German market and reinforce its commercial and operational force.