A Toast To The French
BNP Paribas has played almost “niche” with a much smaller balance-sheet footing.
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The 9th edition of the BW Businessworld Best Banks’ Survey 2016 saw a surprise winner in the ‘Best Growing Foreign Bank’ category — BNP Paribas. It has been around for over 150 years in the sub-continent, but unlike its peers such as Citigroup, Standard Chartered Bank and HSBC that have had a more fulfilling innings out here, BNP Paribas has played almost “niche” with a much smaller balance-sheet footing.
Says BNP Paribas’ country head (India), Joris Dierckx: “We are a corporate and institutional bank and don’t have retail banking activities. Our core strategy over the past few years has been to grow the local balance-sheet to over Rs 30,000 crore now. It has grown four times over the past three years. Today, we are the 6th largest (foreign bank) in terms of total assets from being 10th in 2013”.
It has to be seen in the context that foreign banks don’t get the kind of free-play home-bred banks do, though much of this is linked to reciprocity. Be as it may, what’s commendable is, BNP Paribas has stayed on the wicket, while a lot many from foreign shores threw it away and opted to walk back to the pavilion in the post-meltdown world.
Playing The Game
The bank has a three-pronged strategy — global markets, investment- and transaction-banking. On the corporate banking side, “our clients are mostly Indians, about two-thirds of them, and the remaining are MNCs. Among Indian corporates, we look at the top 200 companies, say the BSE 200, but we have broadened our client base within that set. Of course, we also have some clients outside of that, but that’s because they are unlisted. Essentially, that’s the size of clients we look at. Then, of course, we are very focused on credit quality,” says Dierckx. We don’t know if his last line is a dig at some of his rivals with a long residency in India.
On the cross-border side, the bank feels that only about 10 banks with a truly global client offerings will stay in the game. “Today, we are one of those ten. For our Indian clients, we use this capability to service their financial service needs across the globe. In Asia-Pacific, a lot of our Indian clients are based out of Singapore, but increasingly also Korea where they are making investments,” he says. Home-turf Europe has seen a lot of Indian corporates investing not only in the Eurozone but also in Eastern Europe. “In the UK, which remains a significant entry point for Indian businesses, we have a large presence to support our Indian clients,” he adds.
What sets BNP Paribas apart from other corporate banks in a highly commoditised market is that several of its global businesses — wealth management, asset management, life insurance (with SBI) and personal finance (with Sundaram Finance) — have a presence here. Sharekhan is the most recent addition and brings considerable distribution strength to it. “So, we do have a footprint in retail financial services, though we are not a retail bank here,” he says .
Dierckx feels BNP Paribas India has a strong foundation in place and a commitment from the BNP Paribas Group to invest required capital to build scale and boost its balance sheet. “We are ready to take the opportunity that will arise from the accelerated growth of the Indian market. With our global expertise, we look forward to bringing product knowledge as the economy matures and more sophisticated products are allowed,” he says.