BNP Moves to Grab Bigger Piece of German Private Bank Action

(Bloomberg) -- BNP Paribas SA plans a major hiring spree in German wealth management, seeking to become a leader in one of Europe’s biggest markets.

The Paris-based lender wants to add as many as 150 staff to its private-banking operations across German cities over the next three years according to Vincent Lecomte, co-head of the bank’s wealth-management business. That will about quadruple the unit’s existing staff there. It’s targeting assets under management in the country in the “strong double-digit” billions of euros by 2022, compared with a “single digit” figure currently.

“We want to become a top private-banking player in Germany. We are focused on Mittelstand entrepreneurs,” Lecomte said in an interview, referring to Germany’s medium-sized export-driven companies. To do that, the hiring push includes relationship managers as well as plans to beef up credit and products & services teams, he said. The growth strategy will rely on BNP’s existing investment-banking, lending and real-estate presence.

The wealth-management push is part of a bigger drive by BNP Paribas to boost its annual revenue in Germany by about 8 percent a year to reach 2 billion euros ($2.3 billion) by the end of 2020. The recruiting drive will help the bank reach out to clients with a net worth above 5 million euros, including “mega wealthy” with more than 100 million euros, Lecomte said.

Private Banking

BNP’s private bank had about 50 people in Germany at the end of last year, mostly in partnership with its mobile bank there. In Europe, BNP Paribas’s main private-banking markets include France, Belgium, and Italy, while it also has wealth-management operations in Switzerland. Lecomte declined to estimate the cost of the German expansion plan.

Germany has as many millionaires as France and the U.K. combined, according to Capgemini SE’s 2017 World Wealth Report. But the business with Germany’s family offices and rich entrepreneurs is already well catered-to.

Deutsche Bank AG and UBS Group AG both have extensive operations (although Deutsche Bank has said it will cut positions this year), as do HSBC Holdings Plc and ABN Amro NV, which both operate through local subsidiaries with long traditions. Independent houses such as Hamburg-based Joh. Berenberg, Gossler & Co. KG and M.M. Warburg & Co., Oddo-BHF AG in Frankfurt and Qatar-backed Merck Finck & co. oHG in Munich are also well established.

BNP Paribas Chief Executive Officer Jean-Laurent Bonnafe last month ruled out growing via any large transactions involving rivals such as Commerzbank AG.

“Organic growth remains our priority,” Lecomte said when asked about acquisitions in wealth management. Still, BNP Paribas in February agreed to buy ABN Amro Group NV’s Luxembourg private-banking and insurance assets. The acquisition is expected to close during the summer and it will add 5.6 billion euros in customer assets, bolstering BNP’s leadership as a wealth manager in Luxembourg.

To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Geoffrey Smith, Ross Larsen

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