Bauduin Prot, managing director of BNP Paribas, is galloping through the western United States. Well, maybe it’s a very slow gallop.
The huge French bank, with $646 billion in assets, is increasing its stake in Hawaii-based BancWest Corp. to 100% from 45%, and is planning to use the bank as a springboard into the western United States. BancWest is of significant size, with assets of $19.4 billion. It’s the 36th-largest bank holding company in the U.S.
The acquisition sounds like a good idea. It will make it easier for the French bank to become a more aggressive acquirer in this country. But while it indicates that Prot is showing greater interest in the United States, it’s unclear what actually will come of it.
Pierre Mariani, who heads the French company’s international retail banking activities, was not very specific about the bank’s plans in a phone interview.
He said BNP Paribas, through its ownership of BancWest, will consider expanding in several western states, but has no interest in moving into other areas of the U.S. "If opportunities arise [in the West] in which we could buy a network, we would like to," says Mariani.
But Marianiand BNP Paribas might have an exaggerated sense of just how profitable a retail operation in the United States can be. BNP makes a fortune in many of its overseas consumer units, which accounted for more than 11% of its gross operating profit in 2000. But many of those branches are in Third World countries, mainly in former French colonies, where profitability can be extremely high. Consumer banking tends to be a lot tougher in the industrial countries.
But, says Mariani, "we have had deep experience in the United States."
Indeed, Banque National de Paris has been operating in North America since 1919. Its retail operations here are carried out through BancWest, which owns California-based Bank of the West, and Hawaii-based First Hawaiian Bank. Bank of the West has offices in northern California and about six Western states.
Its wholesale activities are substantial. BNP has large branches in New York and Chicago, and offices in San Francisco, Los Angeles, Houston and Dallas. It also has an agency in Miami that caters to private banking clients.
The French bank also has a substantial investment banking presence in the U.S. through its Paribas arm. BNP merged with Paribas, an investment bank, two years ago.