Fittingly, as the French political season hots up, this publication recently caught up with the wealth management co-heads of BNP Paribas in their Paris HQ.

A bank that has never been shy of promoting the case of “big is beautiful” is France’s BNP Paribas, and its wealth management business – one of the largest in Europe – very much buys into that approach.

As if to remind the industry of its prominence, just over a week ago, the firm announced it will house its London wealth management business in a new 350,000 sq ft office in King's Cross in the northwest of the city, an area that has been through a recent rejuvenation. (This area contains the glorious St Pancras station and its Eurostar terminus, which is very handy for Paris.) There has been plenty of news around the bank’s ambitions: it recently announced a head of non-resident Indians, for North Asia, Akshay Jaitly, for example. In March, the firm moved Béatrice Belorgey from head of investor relations and financial information to deputy head of private banking in France.

And a few days before the first round of the French presidential elections, this publication spoke to Vincent Lecomte and Sofia Merlo, co-chief executives of wealth management, at their offices in central Paris. Wealth management is one of the businesses held in the bank’s Investment Solutions division, which in turn is one of three such divisions.

“Wealth management is a strategic business for the BNP Paribas Group. We have a very diverse business; and we need to leverage this as effectively as possible. The key objective is to raise awareness of our size and scope,” Merlo said.

Stressing the size of the bank should not be a problem. The wealth management business has €245 billion ($323 billion) of assets under management. By way of comparison, Deutsche Bank, its biggest eurozone rival, was a touch larger, with $349 billion of AuM in 2011 (source: Mediobanca). The biggest by far is Bank of America, at $2.136 trillion, although this firm has since reportedly put its non-US business up for sale. But nonetheless, BNP Paribas is a “top 10” wealth management player. It employs more than 6,000 staff in 30 countries.

“We believe that size matters for reasons we have explained; we believe we need to have robust research and processes to meet clients’ needs. That requires resources and high-quality skills,” added Lecomte. He explained that the ever-rising demands, and complex needs, of clients made such breadth of resource essential.

"The strength of our model lies in our ability to leverage corporate and investment banking and retail networks,” he said, adding that there are “important relationships with corporates and entrepreneurs”, referring to close relationships between wealth management and CIB.

Experience

The co-CEOs bring plenty of diverse experience to the job (more than 50 years between them). Lecomte was latterly chief operating officer for wealth management; he had also worked at BNP Paribas' online trader Cortal Consors, where he was deputy chief executive. He started at a US consulting firm and joined BNP Paribas in the early 90s and moved to such roles as chief operating officer. Merlo joined what was then Paribas in the mid-1980s and she has also worked as sales director for wealth management in France, before being appointed head of the French private bank in 2010. They jointly report to Jacques d'Estais, deputy COO of the group.

And perhaps as a telling indicator of the corporate culture at this Paris-listed bank, Merlo has worked at BNP Paribas for 26 years – her entire adult career.

“I am much more responsible for private banking organisations that are linked to BNP Paribas' retail banking networks,” Merlo said. In the case of Lecomte, he covers the Asian and international markets, such as Switzerland, the Commonwealth of Independent States, Middle East and North Africa and Luxembourg, and the key client group, consisting of ultra high net worth clients, and support functions.

“We are jointly responsible for strategy, for the P&L [profit and loss account] we deliver to the group and some of the key global initiatives,” he continued.

“2011 was a tough year in the industry, but in this difficult environment our profits have gone up on the back of increased revenues, while optimising our costs,” Lecomte continued. And of course, no such discussion will be complete without a nod to the sheer weight of regulatory change affecting the industry. Again, however, the co-CEOs reckon BNP’s size and depth puts it in a better position to cope than some of its smaller peers.  

Cross-selling

A chunk of the interview was devoted to a topic that these managers take very seriously: cross-selling. Wealth management is a mixture of people joining from retail and joining from CIB. "It is a team-based, approach. The relationship manager is the key member of the team as ambassadors for the bank, supported by specialists,” Lecomte said.  

This issue leads to the question of how clients are segmented. “When a client’s wealth goes up they will need new services; the client will understand that,” he said.  

And results for last year suggest that even in tough times, and concerns about the future of the euro-zone and its debts, this bank has the geographic reach to ride out storms. In its 2011 full-year figures, there were €3.5 billion of inflows in private banking, essentially in domestic markets and in Asia; some €1.7 billion of inflows in the personal investors business, especially in Germany, and €2.4 billion of inflows in insurance, driven by strong business in Belgium, Luxembourg and Asia.

According to the Mediobanca pan-industry report published recently, Chasing 70 per cent of global GDP, BNP Paribas’ wealth business logged a compound annual growth rate in AuM of 7.5 per cent; the bank also came tenth in Mediobanca’s overall rankings of the world’s largest wealth managers on a range of qualitative and data tests such as profitability, brand, geographic spread and assets.

Coming tenth in such rankings is not bad, but one gets the feeling that BNP Paribas is not going to settle for a double-digit ranking.