BNP Paribas SA is outpacing the wealth-management businesses of French competitors Societe Generale SA and Credit Agricole SA as the country’s largest bank targets the super-rich in Asia and America.
Net inflows more than doubled to 7.5 billion euros ($9.8 billion) last year as the Paris-based company attracted money from clients in China, Singapore, Indonesia and Malaysia, wealth unit co-heads Vincent Lecomte and Sofia Merlo said in an interview. Societe Generale lured a net 1 billion euros, while Credit Agricole reported outflows of 2.7 billion euros in 2012.
French banks are fighting over rich emerging-market clients to boost revenue as tougher capital requirements crimp investment-banking profitability. BNP Paribas is expanding from its western European base, which accounts for about 60 percent of its wealth assets, to vie with bigger managers, including Switzerland’s UBS AG and Credit Suisse Group AG.
“BNP is in the Champions League of wealth management and there’s a clear difference in terms of size with its nearest French peers,” said Sebastian Dovey, founder of London-based research firm Scorpio Partnership. “The challenge for the top private banks is to create truly global ultra-high-net-worth businesses.”
While assets under management at BNP Paribas climbed 8.6 percent to 265 billion euros, that’s still barely a fifth of the funds at UBS, the biggest Swiss bank.
Asian Growth
BNP Paribas hopes that Asia, where Lecomte and Merlo expect to double assets and revenue over the next three to five years, will help close the gap. Rich Asians may increase assets by more than 11 percent a year through 2016, according to a report last May by Boston Consulting Group.
Turkey, Poland and Morocco are also targets for expansion and BNP Paribas wants to attract more ultra-wealthy individuals with at least 25 million euros in investable assets.
“The growth in assets is in line with our target and it’s quite satisfactory compared with our peer group,” said Lecomte. “This is a business the bank is investing in.”
Revenue and profit rose at BNP Paribas’s wealth-management unit in 2012, while the business’s return-on-assets was little changed, Lecomte said, declining to provide further details.