Now that the integration of BNP Paribas Fortis into the BNP Paribas Group is virtually complete, the Bank is adjusting its strategic objectives for the period 2013 to 2015. This strategy update is driven by three major trends: the fundamental changes in the macro-economic environment; the specific features of the Belgian market; and the changing needs and expectations of our clients due to the evolution of digital technologies.
“BNP Paribas Fortis intends to play an undiminished role in the Belgian economy. We are a universal bank for families, companies and public institutions through an innovative multi-channel approach, and we offer a range of products and services in which the needs of the client are paramount,” comments Max Jadot, CEO of BNP Paribas Fortis.
The main lines of the strategy update announced today are:
- BNP Paribas Fortis will progressively adapt its branch network in line with the needs of its clients. For individual clients, the Bank is investing more in its digital offering.
- For Private Banking clients, the bank will continue to invest in the rollout of Wealth Management services, including both advisory and discretionary portfolio management.
- For companies, BNP Paribas Fortis acts from now on as the Competence Centre for the entire BNP Paribas Group for specialised finance activities, such as Export Finance and Project Finance.
- The historically low interest rates and low economic growth prospects give insufficient perspective on income increases. This means that BNP Paribas Fortis will continue to pay attention to keeping costs flat in the next three years.
- Focus, in all areas, will be placed even more on operational efficiency and process industrialisation in order to contribute to the overall aim to manage costs and to bring the cost-income ratio under 70%.
- In the next three years, hiring numbers will amount to just under 200 per year, while the recruitment level during the integration period reached a high average of 850 per year.
Industrial Plan approaches completion
The Industrial Plan that was presented in December 2009 with regard to the integration of BNP Paribas, is now approaching completion. What has emerged from the Plan is a strong Belgian bank with a clear mission: to serve both the local and international needs of the Belgian market. In the first years of the Plan, emphasis was placed on reducing risk levels by slimming down the balance sheet (from €587 billion to €346 billion at the end of 2011, or a decrease of more than 40%) and boosting liquidity and solvency. At the same time, we invested over €150 million in the multi-channel network, modernised our branches and set up a broad network of Private Banking Centres.
BNP Paribas Fortis has also taken on a range of important tasks on behalf of the Group. A number of Competence Centres, including Trade Finance, Cash Management and Factoring are now based in Brussels, as well as the activities of Corporate & Transaction Banking Europe (CTBE), the BNP Paribas Group’s European network of 150 Business Centres set up to serve corporate clients in 16 countries.
BNP Paribas Fortis has also taken strategic decisions designed to generate a stable income stream. The acquisition of Fortis Commercial Finance with a view to reinforcing our factoring business, investments in the leasing business and the optimisation of our international network demonstrate the will of the management to achieve this aim.
Clear evidence that BNP Paribas Fortis is fulfilling its role of supporting the Belgian economy arises from the fact that since 2009 total customer deposits have risen 20.5% to reach €101bn in the third quarter of this year. Lending over the same period increased by 17% to €84bn, some 55% of our outstanding loans being out to entrepreneurs, SMEs, major corporates and public institutions. These figures clearly show that BNP Paribas Fortis keeps playing a full part in financing Belgium’s real economy.
Limited growth prospects and interest rates at a historical low
In response to the economic crisis, the European monetary authorities have been keeping short-term interest rates virtually at zero percent in the last half year and it seems unlikely that they will rise again in the next few months. Moreover, the spread between long- and short-term interest rates has been extremely narrow for quite some time now. The basic job of a bank is to convert short-term savings deposits into longer-term loans. The persistent narrowing of the interest rate spreads, putting pressure on banks’ income, poses a considerable challenge to the banking sector.
Staying ahead of the changing needs and expectations of our clients
The digital communication revolution, as represented by smartphones and tablets, has radically altered the day-to-day behaviour and expectations of our individual clients. In 2010 BNP Paribas Fortis was the first Belgian bank to offer Mobile Banking via smartphone. Easy Banking for tablets followed in 2012. Today we are more than ever determined to keep pace with, and respond rapidly to, changing customer needs.
A few indicators clearly demonstrate the evolution that has been taking place. For some years now a clear shift towards direct channels for transactions has been apparent. For example, over the last five years, the number of basic transactions carried out at branch counters has dropped by 50% to 80%. By contrast, the number of advisory meetings at the branches rose by some 35% in the same period. Some 400,000 sessions take place every day on our self-service facilities – both cash and non-cash operations – plus 300,000 PC Banking sessions. Of our 3.7 million customers, 2.1 million have a PC Banking contract and 170,000 an Easy Banking contract. The recent launch of an Android version has now brought Easy Banking within reach of even more of our clients.
Now that the integration of BNP Paribas Fortis into the BNP Paribas Group is virtually complete, the Bank is adjusting its strategic objectives for the period 2013 to 2015. This strategy update is driven by three major trends: the fundamental changes in the macro-economic environment; the specific features of the Belgian market; and the changing needs and expectations of our clients due to the evolution of digital technologies.
“BNP Paribas Fortis intends to play an undiminished role in the Belgian economy. We are a universal bank for families, companies and public institutions through an innovative multi-channel approach, and we offer a range of products and services in which the needs of the client are paramount,” comments Max Jadot, CEO of BNP Paribas Fortis.
The main lines of the strategy update announced today are:
- BNP Paribas Fortis will progressively adapt its branch network in line with the needs of its clients. For individual clients, the Bank is investing more in its digital offering.
- For Private Banking clients, the bank will continue to invest in the rollout of Wealth Management services, including both advisory and discretionary portfolio management.
- For companies, BNP Paribas Fortis acts from now on as the Competence Centre for the entire BNP Paribas Group for specialised finance activities, such as Export Finance and Project Finance.
- The historically low interest rates and low economic growth prospects give insufficient perspective on income increases. This means that BNP Paribas Fortis will continue to pay attention to keeping costs flat in the next three years.
- Focus, in all areas, will be placed even more on operational efficiency and process industrialisation in order to contribute to the overall aim to manage costs and to bring the cost-income ratio under 70%.
- In the next three years, hiring numbers will amount to just under 200 per year, while the recruitment level during the integration period reached a high average of 850 per year.
Industrial Plan approaches completion
The Industrial Plan that was presented in December 2009 with regard to the integration of BNP Paribas, is now approaching completion. What has emerged from the Plan is a strong Belgian bank with a clear mission: to serve both the local and international needs of the Belgian market. In the first years of the Plan, emphasis was placed on reducing risk levels by slimming down the balance sheet (from €587 billion to €346 billion at the end of 2011, or a decrease of more than 40%) and boosting liquidity and solvency. At the same time, we invested over €150 million in the multi-channel network, modernised our branches and set up a broad network of Private Banking Centres.
BNP Paribas Fortis has also taken on a range of important tasks on behalf of the Group. A number of Competence Centres, including Trade Finance, Cash Management and Factoring are now based in Brussels, as well as the activities of Corporate & Transaction Banking Europe (CTBE), the BNP Paribas Group’s European network of 150 Business Centres set up to serve corporate clients in 16 countries.
BNP Paribas Fortis has also taken strategic decisions designed to generate a stable income stream. The acquisition of Fortis Commercial Finance with a view to reinforcing our factoring business, investments in the leasing business and the optimisation of our international network demonstrate the will of the management to achieve this aim.
Clear evidence that BNP Paribas Fortis is fulfilling its role of supporting the Belgian economy arises from the fact that since 2009 total customer deposits have risen 20.5% to reach €101bn in the third quarter of this year. Lending over the same period increased by 17% to €84bn, some 55% of our outstanding loans being out to entrepreneurs, SMEs, major corporates and public institutions. These figures clearly show that BNP Paribas Fortis keeps playing a full part in financing Belgium’s real economy.
Limited growth prospects and interest rates at a historical low
In response to the economic crisis, the European monetary authorities have been keeping short-term interest rates virtually at zero percent in the last half year and it seems unlikely that they will rise again in the next few months. Moreover, the spread between long- and short-term interest rates has been extremely narrow for quite some time now. The basic job of a bank is to convert short-term savings deposits into longer-term loans. The persistent narrowing of the interest rate spreads, putting pressure on banks’ income, poses a considerable challenge to the banking sector.
Staying ahead of the changing needs and expectations of our clients
The digital communication revolution, as represented by smartphones and tablets, has radically altered the day-to-day behaviour and expectations of our individual clients. In 2010 BNP Paribas Fortis was the first Belgian bank to offer Mobile Banking via smartphone. Easy Banking for tablets followed in 2012. Today we are more than ever determined to keep pace with, and respond rapidly to, changing customer needs.
A few indicators clearly demonstrate the evolution that has been taking place. For some years now a clear shift towards direct channels for transactions has been apparent. For example, over the last five years, the number of basic transactions carried out at branch counters has dropped by 50% to 80%. By contrast, the number of advisory meetings at the branches rose by some 35% in the same period. Some 400,000 sessions take place every day on our self-service facilities – both cash and non-cash operations – plus 300,000 PC Banking sessions. Of our 3.7 million customers, 2.1 million have a PC Banking contract and 170,000 an Easy Banking contract. The recent launch of an Android version has now brought Easy Banking within reach of even more of our clients.
The Bank prepares for the future
BNP Paribas Fortis has a clear ambition to be the bank of choice for all types of clients – individual customers, families, independent professionals and the self-employed as well as small or medium-sized enterprises and major corporates. This is why BNP Paribas Fortis has opted for a client-centric, multi-channel strategy: a coherent set of mutually complementary channels that enable customers to take care of their banking operations whenever and wherever they wish. BNP Paribas Fortis retains a strong belief in its role as a universal bank offering a range of products and services in which the needs of the client take centre stage.
For individual clients, BNP Paribas Fortis is now further developing the multi-channel approach. To better address the needs of the new generation ‘digital natives’ and clients who wish for a more independent relationship with the bank, BNP Paribas Fortis will invest in the digital offering (Mobile Banking and Contact Centres). In response to changing customer needs and shifts in behaviour, the bank also intends to adapt the branch network.
Some branches will therefore focus more on high-added-value advisory service, of Relationship Managers and specialists. At other branches, BNP Paribas Fortis will be making further investments in the provision of ATMs, on which customers can carry out all basic operations. The four existing Contact Centres with 400 staff will be expanded with an extra 100 people.
In order to meet changing client needs the focus will be put on the one hand on reinforcing the expertise of the client advisors and on the other hand making it easier for clients to contact the bank. Consequently the Bank will increase its efficiency and approachability and the employability of its employees with the ultimate aim of providing a better overall customer experience. This will enable us to gradually adapt our commercial network to our clients and keep pace with their fast-changing expectations.
For our Private Banking clients, BNP Paribas Fortis is forging ahead with the rollout of our Wealth Management advisory services and both advisory and discretionary portfolio management.
Companies and entrepreneurs are the veritable backbone of the Belgian economy and also a key component in BNP Paribas Fortis strategy. We intend to step up even further the efforts we have been making in recent years to support self-employed business people and small or medium-sized companies. Our Commercial & Public Banking division will be focusing mainly on providing solutions for companies with more specialised needs.
Meanwhile BNP Paribas Fortis will be building on its acknowledged expertise in Specialised Finance for major corporates, expanding in particular its services in the field of Export Finance and Project Finance. As from 2013 BNP Paribas Fortis will take over all BNP Paribas Group Specialised Finance activities for Europe (excluding France and Italy), the Middle East and Africa. In the near future, the Group will occupy a leading position worldwide in these activities, which are crucial for the smooth functioning of the real economy.
This move will more than double BNP Paribas Fortis’ existing Specialised Finance business and lead to the development of additional capabilities in our service provision to corporate clients in Belgium.
In the support services a major investment effort will be made in the area of risk management and adapting the organisation to the new regulatory framework. In addition, emphasis in the future will be placed on optimisation of digital solutions and offering innovative solutions for everyday banking. To further improve the customer experience, the value chain of each banking product will be reconsidered from start to end. This simplification and facilitation of processes leads to increased quality and efficiency and will contribute to the general aim of keeping costs flat for the next three years.
Strict cost control
The historically low rates and very low economic growth forecasts do not hold out any encouraging prospects of income growth. BNP Paribas Fortis will therefore over the next few years continue to pay careful attention to cost management with a view to keeping its cost-income ratio below 70%.
Due to efforts made by our employees in the past years, such as the implementation of a new compensation policy, BNP Paribas Fortis will be able to achieve this objective at the pace of natural staff turnover. Accordingly we will over the next three years reduce our relatively high annual recruitment level from 850 during the integration period, to just under 200 new hirings per year.
BNP Paribas Fortis is one of the biggest employers in Belgium and will continue to invest in its human capital in the coming years and respect its commitments to the social partners.
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BNP Paribas Fortis is part of BNP Paribas, which has a presence in 80 countries with nearly 200,000 employees, including more than 150,000 in Europe. It ranks highly in its three core activities: Retail Banking, Investment Solutions and Corporate & Investment Banking. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the leader in consumer lending. BNP Paribas is rolling out its integrated retail banking model across Mediterranean basin countries, in Turkey, in Eastern Europe and a large network in the western part of the United States. In its Corporate & Investment Banking and Investment Solutions activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas and solid and fast-growing businesses in Asia.
Under the name BNP Paribas Fortis, the bank offers the Belgian market a comprehensive package of financial services for private individuals, the self-employed, professionals and SMEs. In the insurance sector, BNP Paribas Fortis works closely with Belgian market leader AG Insurance. The bank also provides wealthy individuals, corporations and public and financial institutions with custom solutions for which it can draw on BNP Paribas’ know-how and international network.
More information is available at www.bnpparibasfortis.com and www.bnpparibas.com.