Launched in 2005 and completed in the first quarter of this year, the acquisition of Italian BNL by Paris-based BNP Paribas is one of those deals Europe will remember for years to come.
Spain’s BBVA was the first to eye up BNL, but then dropped out of the long fight in a foreign-company-adverse market, cultivated by the then management of the Bank of Italy.
It was BNP Paribas that eventually got the deal, completing it under the re-born Italian central bank’s impartiality. The acquisition gave the French bank access to the Italian savings-rich and still relatively unsophisticated banking market, and a new retail distribution for its equity capital markets business.
BNL is the sixth retail bank by Tier 1 capital in Italy, with more than 800 branches and 17,000 employees, and was acquired for about E9bn.
However, an acquisition is only as good as the financial results that it brings to the acquirer. One needs only to look at BNP Paribas’s third quarter results this year to see how successful BNL’s integration has been. Among the French bank’s main growth drivers were financial services and international retail banking, which brought in revenue of €1.86bn, up 25% from last year, thanks mainly to the revenue contribution of €759m from BNL, which delivered a third quarter pre-tax profit of €197m.
The judges also noted BNP Paribas’s good financial performance, generous 20.2% return-on-equity and decreasing non-performing loans ratios.
