U.S. wealth advisors are in for some competition, if BNP Paribas has anything to say about it. France’s largest bank intends to look outside Europe for growth, and has revealed a five-year plan to seek that growth in broadening the amount of wealth management services it provides for the affluent in the U.S.
Bloomberg reported Wednesday that while BNP Paribas suffered in 2011 due to a paucity of liquidity in U.S. dollars and losses on Greek debt and divested of some U.S. assets to lower short-term dollar funding requirements, it has plans to recoup lost ground by expanding its presence in the U.S. among the affluent.
Sofia Merlo, co-head of wealth management at the Paris-based bank, said in the report that BNP Paribas has combined trust, brokerage and private banking services at its Bank of the West unit, which it took control of in 2001, as it seeks to manage more money for wealthy people in the U.S.
John Bahnken, head of wealth management at the unit, said that Bank of the West, which opened a flagship office in San Francisco’s financial district on Sept. 5, manages about $10 billion, more than two thirds of which is in brokerage accounts. In the report, Bahnken was quoted saying that wealth management has “turned into a significant positive story.”
He added, “We came to the conclusion that given the client base and changing regulatory environment it was important to provide wealth management” for U.S. clients. The bank offers its affluent customers services ranging from investment advice to assistance with everything from business succession and retirement to real estate, art and philanthropy.
Bahnken said that wealth management not only provides noninterest income, it also entails less risk than more capital-intensive businesses and allows the bank to better meet the capital rules outlined by the Basel Committee on Banking Supervision.
Merlo said that the bank’s plans in the U.S. are part of a broader strategy to expand in smaller markets such as Turkey, Poland and Morocco, where it also has large retail branch networks. It also intends to grow in the Middle East, Asia and Italy. She said in the report, “It’s very important to have this footprint in the United States,” adding that besides U.S. customers, “many clients in Europe or Asia want to have some of their wealth in dollars.”
According to Bahnken, Bank of the West has about 1.2 million clients. Those with at least $250,000 in assets at the bank will be eligible for the enhanced service. At present, the bank has 55 private client advisers; that’s up from 25 in 2011. Those advisors devote about 80% of their time acquainting current clients with the service, and 20% seeking new clients.