13th June 2024

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Business Industry and Financial

BNP Paribas might actually be Europe’s best investment bank

Over a year ago, BNP Paribas dramatically announced its plan, with all the pomp of corporate communications training can bring, to be “”the first European corporate and investment bank among global tier one players.” It might have just reached its target.

That’s what the data suggests, at least. Dealogic, the market intelligence provider, has revealed its investment banking revenue rankings for the first half of the year around the world, including EMEA.

In EMEA at least, BNP is the biggest European bank, having leapfrogged Barclays, its last rival. It ranks fourth overall, behind JPMorgan, Goldman Sachs, and Citi.

How did BNP achieve this? It helped that while total IB revenues in the region fell by some 14% and other investment banks’ revenues fell accordingly, BNP’s rose by 11%. That’s pretty good in a normal year, but when market leader JPMorgan falls by 23%, it’s better than “pretty good”. BNP’s market share rose from 3.8% to 4.8% between the two periods.

Globally, things also went quite well. BNP rose from 12th to 9th in the global investment bank rankings. However, it came in sixth on a global basis, behind the top North American banks, plus Barclays and UBS.

Debt capital markets (DCM) revenues were a key contributor to BNP’s performance; the bank was EMEA’s top DCM player in the first half of 2023, up from second in 2022. DCM has been a lot more resilient than both M&A and equity capital markets (ECM) – whilst DCM revenues rose by 18% in H1 2023 compared to H1 2022, M&A and ECM fell by 11% and 25% respectively. As Mediobanca analyst Matthew Clark told Bloomberg, “BNP is the last man standing in European investment banking.”

What’s made the difference for BNP’s people this year over last? It’s hard to say. A 14% increase in the bonus pool for senior bankers (as Bloomberg reported) almost certainly didn’t hurt. The bank has had a somewhat stingy reputation for a long time, which it doesn’t help by giving vouchers for Christmas to its traders.

The bank has also brought in some new faces this year, but it hasn’t yet taken advantage of huge swathes of Credit Suisse bankers joining the market like Deutsche Bank has. Still, it’s picked up a few MDs here and there; Jacqueline Taylor, an investment banker, from JPMorgan, and Josh Farber, a credit trader, from Credit Suisse.

It benefited from Credit Suisse and Deutsche Bank in other ways. In particular, it took over Deutsche’s prime brokerage business back in 2019.

Much of BNP’s growth is organic. As BNP’s CFO Lars Machenil told Bloomberg, most of the bank’s investments will be retail focused, whilst “The remainder will be allocated to bolt-on deals, either to take over units or portfolios that our competitors want to dispose of, should they complement our offer, or to acquire some technology.”

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