Trading Floor Thursdays: BNP Paribas
It’s Thursday, that means Maria Bartiromo will report live from a Trading Floor in New York City.
Today, we’ll be live at home of BNP Paribas Americas’ fixed income trading floor located just blocks from the NASDAQ MarketSite.
On an average day, a quarter of a trillion dollars in fixed income instruments is traded on their very floor. BNP ranks #1 for treasury-inflation protected securities, better known as 'TIPS.'
BNP’s Global Footprint
You may not see a BNP bank on every street corner here in NYC (like Citi and Chase) but this French bank (France’s largest bank) does have a pretty impressive global footprint. BNP Paribas operates in over 85 countries with over 200-thousand employees worldwide. The bank has doubled in size over the last 10 years to become the biggest bank in the Eurozone by deposits.
"Credit Crisis is Behind Us"
Last week, BNP Paribas recorded a profit of $2.1 billion, net profits rose 13.6 percent. “Overall we saw a strong performance globally as a bank and we saw the bottom-line improving,” Everett Schenk, North America CEO said. Schenk believes that “cost to risk has diminished which tells us the credit crisis is materially behind us.”
No Deals! Organic Growth
Schenk said BNP Americas “will not make a significant acquisition in the U.S. But, we are expecting the synergies from the Fortis acquisition to pay off going forward.” That only means the firm will need to grow organically. Schenk plans to do that by expanding and gaining market-share in the institutional business, sales and origination side. “We continue to move ahead with launching our global platform - which broadens our platform in non-dollar denominated products,” said Schenk.
"Volatility Creates Opportunity"
Global markets continue to be under pressure as we see unrest in the Mideast region. “There is no doubt there's increased uncertainty, but volatility tends to create opportunities,” said Schenk. Putting the concerns of the Mideast aside, Schenk will continue to “execute” their plan and we remain “focused” on their strategy.
Energy will continue to be an “area of expansion” for BNP. “We continue to have a strong energy platform, the bond markets are open for business, Corporate America is flush with cash and so again, these events are not materially effecting our platform. We have a structuring skill set across products and we have a risk culture — we're spending a lot of time in advisory settings, focusing on structure product solutions to relieve client risk,” said Schenk.
Schenk also pointed out the firm will continue its expansion on credit trading activity, both investment grade and non-investment grade. In addition, BNP will launch their prime brokerage global platform in April, a deal BNP had done with BofA back in October of 2008. Schenk said, “we'll be able to clear non-dollar transactions, which is a big positive.”
Greatest area of growth potential according to Schenk is BNP’s asset management and hedge funds business. “There’s growth potential in the U.S. is with our institutional investors,” said Schenk.
However regulatory concerns may pose a roadblock for BNP’s growth strategy here in the U.S. Schenk said, “We're a bit constrained on how we'll conduct business based on the regulatory environment. A lot of it is clearing and execution for us and the uncertainty. We will continue to be a clearer for derivatives and we'll continue to invest in that area. As for Basel, we have met the capital requirements and we're more than comfortable with capital position. We're working to consolidate broker/dealer business to improve efficiency. Landscape seems to be changing, but its not threatening to our platform overall.”
BNP Americas is looking to hire more than 200 people this year. And over the next three years, Schenk expects to add 750 to 1,000 employees to its payroll.
Everett Schenk, North America CEO of BNP Paribas will join Maria Bartiromo at 4:15PM/ET on Closing Bell to talk BNP’s bottom-line, growth strategy and hiring.
Questions? Comments? Write firstname.lastname@example.org