1. One of the key themes of the 2007 World Economic Forum in Davos is driving growth. How does your bank propose to drive growth in the coming year?
BNP Paribas’ aim is to overperform the market through innovation, whether in developing new products [such as derivatives] or in developing new channels of distribution.
After the acquisition in 2006 of BNL, the sixth largest bank in Italy, BNP Paribas will remain focused on organic growth, and of course on the development plan of BNL. Our acquisition policy will therefore remain focused on small, selective targets, able to accelerate our organic growth.
I see in particular three ways to foster growth at BNP Paribas:
- Implementation of a more efficient organisation in our different businesses – the European banks in particular have a lot to learn from the manufacturing industry, for instance in terms of processes and segmentation of the value-added chain.
- Customer satisfaction. We have made a lot of effort to address our customers needs better which are now bearing fruit in terms of gaining customers: rising customer satisfaction is a guarantee of future revenue growth, and a powerful motivation tool for our teams.
- Continue to expand selectively in some emerging markets, as these markets are a key element of any long-term growth strategy.
2. What are the main challenges facing the global economy in 2007 and how will your bank cope with them?
After a few years of exceptional global growth and liquidity, in which basically all the major banks have seen very strong results, the economic landscape will probably be more volatile and more uncertain in 2007. Our solid business model will help us in this context as BNP Paribas is among the most diversified banks in the world, both geographically and in terms of business mix.
This is not a mere historical coincidence, but a deliberate choice, since the merger of BNP and Paribas. This diversification along with our strong risk and cost control culture is of course an asset in bad times, but it also drives growth year after year, because our businesses are complementary: they generate cross-selling, they use the same set of skills or they share the same platforms.
The second challenge is a regulatory one with Basel II, the Markets in Financial Instruments Directive [MiFID] and the Single Euro Payments Area [Sepa] all on the horizon. The regulatory burden on bank businesses is increasing every year, partly for good reasons, partly for less convincing ones. BNP Paribas is investing a lot to comply fully with the regulations, but also we see these constraints as new opportunities. 2007 will be the first year of implementation of the Basel II framework in Europe, and we are ready to apply the most advanced modelling techniques.
3. These days a global bank’s brand is one of its key assets. Can you describe your bank’s approach to managing brand value?
When BNP Paribas was created, we decided to invent a new brand with a strong visual that represented the openness, creativity and ambition of “the bank for a changing world” (our corporate slogan). This brand has been consistently developed as a global brand in corporate and investment banking, asset management and private banking.
Our global visibility has been boosted mainly by a strong tennis sponsorship strategy covering the Davis Cup, the Fed Cup and the French Open among many other tournaments. A total of four billion television viewers watch these events. In 2007 we add to this list the Rome Open.
In retail banking, BNP Paribas operates either through its global brand or through local ones (such as BNL in Italy), but even when keeping a different name, the trend is to associate them to the ‘stars in flight’ BNPP logo and to mention explicitly the group’s endorsement.
After six years of existence in its new form, the BNP Paribas brand has been valued at €5.1bn by Interbrand, which makes it the third largest global brand headquartered in France, after Louis Vuitton and L’Oréal, and one of the most recognisable financial services brands in the world.
4. Climate change is now firmly on the mainstream political and business agenda. Can you tell us about any initiatives that your institution is taking on this or other environmental issues?
The principles of the UN Global Compact, signed by BNP Paribas in 2003, have been implemented throughout the group. Environmental responsibility now forms an integral part of the group’s global business principles. Furthermore, to help combat global warming, and to monitor the impact of its activities on the environment, the group has implemented a tracking system to evaluate its energy consumption in CO2 kilograms. Although BNP Paribas has a light ecological footprint, improving our eco-efficiency is a continual task that involves every group employee. For instance, BNP Paribas is highly active in the market of CO2 emissions quotas. In 2006, a dedicated carbon team was created to inform clients and enable them to seize opportunities related to trading and financing CO2 emission permits. The group is also the European leader in wind energy financing.
5. Bank chairmen and CEOs are natural optimists. What reasons do you have for being optimistic in 2007?
At BNP Paribas, we tend to be only cautious optimists, because we never make promises that we cannot deliver!
