A new €10 billion ($15.56 billion)
force in Anglo-Dutch wealth management is being created via a
strategic partnership deal between BNP Paribas Private Bank and
Dutch private bank and asset manager Insinger de Beaufort.
Under the venture, BNP Paribas Private
Bank will take a 35 percent stake in Insinger for €60 million and
combine its London private banking activities with those of
Insinger and Nachenius Tjeenk, the French group’s Dutch private
banking arm.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
BNP Paribas Private Bank will have a 60 to 65
percent ownership of the new entity with Insinger holding the
remainder. Insinger can sell its stake to BNP in 2013.
When the transaction closes in early 2009, the
new group will manage over €10 billion of client assets which it
claims will position it at the forefront of the wealth management
industry in its target markets.
The venture will rank as a top-five player in
the Netherlands, rivalling private banking operations of ING ,
Fortis, KBC’s Theodoor Gilissen and Rabobank’s Schretlen &
Co.
The operation will headquartered in Amsterdam
with branches in The Hague and Eindhoven for the Dutch private
banking market and asset management activities in London for
wealthy international clients.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“This strategic partnership will enable us to
create a highly visible Anglo-Dutch wealth management specialist
benefiting from the backing of a global financial group,” explained
Francois Debiesse, chief executive of BNP Paribas Private Bank. He
will become chairman of the supervisory board of the combined
group.
“By combining our strengths, and our highly
complementary business models, I believe that we can build up a
driving force in the buoyant Dutch domestic market and UK offshore
market and further strengthen our competitive position in these
markets,” he said.
Peter Sieradzki, chief operating officer of
Insinger and chief executive officer designate of the combined
group said that “now is the right time for the business to move to
the next level through this strategic partnership.”
At the end of March, Insinger had €5.6 billion
of assets under management while Nachenius Tjeenk, which BNP
Paribas Private Bank acquired in 2005, had €2.4 billion in AuM.
BNP Paribas Private Bank in London, which
focuses on the management of wealthy international clients,
supervised €2.3 billion of client assets in the UK as of March. The
new venture could give BNP Paribas valuable new momentum in
British-based wealth management after a setback last year.
It was fined £350,000 ($675,000) in May 2007
for failing to prevent a senior employee fraudulently removing £1.4
million from clients’ accounts. The Financial Services Authority
(FSA) said the employee, a manager, had been able to exploit
serious weaknesses in the systems and controls at BNP’s private
banking division.
This marked the first time a UK-based private
bank has been fined for weaknesses in its anti-fraud systems.
As a result, the manager was able to move
money out of client accounts on 13 occasions from February 2002 to
March 2005, forging clients’ signatures and falsifying changes of
address.
BNP did not have proper systems in place
clearly requiring senior managers to check and authorise large
transactions, the regulator said. In addition, the FSA said the
bank’s computer systems enabled senior staff to get round normal
authorisation checks.
BNP private banking in good
shape
Meanwhile, pre-tax profits at BNP
Paribas’ Wealth and Asset Management business fell 6.8 percent to
€966 million in the first half of 2008. For the second quarter, the
division’s pre-tax income was €536 million, down a narrow 4.1
percent compared to the record level in the second quarter 2007 and
up 24.7 percent compared to the first quarter of 2008, making it
what the bank called the “all-time second best performance in terms
of net income.”
Revenue for the business totalled €2.66
billion, up 1.9 percent compared to the first half of 2007and €1.4
billion for the second quarter compared to €1.36 billion for the
same period in 2007.
Assets under management totalled €546 billion
as at 30 June 2008, compared to €548 billion as at 31 March 2008.
Net asset flows in the second quarter fell €1.6 billion, but within
this private banking displayed “a good performance” where inflows
were €2.9 billion, of which €1.1 billion originated in Asia.
Net asset outflows of €6.1 billion were
recorded in asset management, which was affected by the
re-allocation of household savings in Italy as well as a net asset
outflow in monetary funds.
