After a lengthy battle to snap up Fortis
Banque, BNP Paribas finally closed the deal in May – becoming the
eurozone’s largest bank by deposits in the process. Douglas Blakey talks
to Franciska Decuypere, retail banking marketing head at the newly
rebranded BNP Paribas Fortis, about the new, more powerful
group.
It was one of the most protracted and at times among the most
acrimonious of recent banking takeover deals but, in May, seven
months after first announcing plans to acquire Fortis Banque, BNP
Paribas (BNPP) donned the mantle of the eurozone’s largest bank by
deposits (see chart below).
Go deeper with GlobalData
The acquisition of Fortis’ banking interests
provided a timely boost to BNPP’s strategy of augmenting its retail
revenue streams as it pares back its investment and corporate
banking operations. In particular, the deal gave BNPP an extra 3.3
million retail customers in Belgium and Luxembourg while its branch
network increased by more than 1,100 outlets.
For Fortis, which as recently as 2006 posted
profits of €4.5 billion ($6.3 billion) and boasted a market value
of more than €45 billion, closure of the BNPP deal ended a
tumultuous two year period, dating back to the April 2007
announcement that it had joined up with Royal Bank of Scotland and
Santander to bid for Dutch-headquartered ABN AMRO.
The thinking behind Fortis’ ill-fated
participation in the consortium had been to create the lead retail
banking player in the Benelux region, ranking number one in Belgium
and third in the Netherlands, with more than 10 million retail
customers and 2,500 branches across Europe.
The Fortis name is, however, to survive the
deal with BNPP, with the group’s retail branches in Belgium and
Luxembourg currently undergoing a rapid rebranding to BNP Paribas
Fortis.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“I think there is a very important message in
keeping the Fortis name. We thought about it and it would have been
easy to say simply go with BNP Paribas,” Franciska Decuypere, head
of marketing for retail banking at BNP Paribas Fortis, told
RBI.
During the global economic crisis, Decuypere
conceded that dropping the Fortis brand entirely was the most
likely outcome, but said it was the management at the French parent
that ultimately rejected the notion.
“It is also a sign of respect from BNPP to the
local Belgian market, to the company and to its people to keep
Fortis and there are strengths to take from both banks. So the
message is that we want the best of both worlds for the benefit of
the customers – the best of BNPP and the best of Fortis,” she
added.
A very fast, light rebranding
|
Metrics |
||
|
Fortis Banque – key figures, |
||
|
Belgium |
Luxembourg |
|
|
Network |
||
|
Retail banking branches |
1,064 |
37 |
|
Private banking centres |
10 |
3 |
|
Business centres |
22 |
1 |
|
Clients |
3 million |
280,000 |
|
Market position |
||
|
Retail banking (deposits) |
#1 |
#1 |
|
Consumer lending |
#2 |
#2 |
|
Source: BNP Paribas |
||
The new bank lost no time in announcing its arrival with what
Decuypere termed a “very fast, light rebranding”.
This involved all branches sporting the new
name, colour scheme and logo by way of stickering within two weeks
of its May launch, while in-branch brochures were also updated with
the minimum of delay. In the third quarter, the bank will undertake
a full rebranding of its branch network external signage and
in-branch displays.
Having sorted out a name, Decuypere was at
pains to set out BNP Paribas Fortis’ first priority, with the
economic crisis uppermost in the minds of the bank’s
management.
“The first priority is to show customers that
we have understood how the crisis in the financial sector has
affected them and we have understood what changes they expect from
us as a bank,” she explained.
“We have employed as our tag line ‘A bank and
insurer for a changing world’ but that is not just a marketing
message… We really want to translate that into everyday change.
“We did a lot of research into how customer
behaviour and expectation has changed as a result of the
crisis.”
That has translated into a set of five
principles which Decuypere said will determine how the bank
operates and forms the basis of its customer proposition, which she
summarised as:
1. A bank which is ‘transparent’, offering
open and clear communication to its customers. “That means daring
to tell its customers what the advantages are of the choices they
make and explaining products in a way customers understand,”
Ducuypere said.
2. A partner for long-term projects – one that
is not just interested in short-term gain.
3. A bank that listens to its customers and
makes propositions consistent with their needs. “Our whole tone of
voice has to reflect the bank’s values… it is crucial customers
feel that the bank is acting in its interests,” she said.
4. A commitment to ‘local society’ and
engaging in social, educational and cultural activities, while
conducting business ethically; and
5. Accessibility: “Customers should not have
to take a day’s holiday to meet the correct person at the bank,”
she said.
While the message that the ex-Fortis Bank has
learnt its painful lessons of the global banking crisis has been
its first priority, a very close second is that it remains very
much open for lending business.
To that end, less than one month after its
launch, BNP Paribas Fortis kicked off an integrated advertising
campaign devised by its media partner Publicis Belgium, under the
banner ‘One billion euros’.
The theme of the ads, aimed particularly at
Belgium’s self-employed, professional and business community,
highlighted the availability of €1 billion in loans for the bank’s
key target groups.
“This first campaign seeks to get over an
important message. A number of entrepreneurs and small businesses
in Belgium had said there was a lack of loan finance and that they
were unable to expand their businesses because banks were not
lending.
“Not so and this campaign carries a strong
statement from BNPP that we that we have a €1 billion budget for
small business lending in Belgium,” stressed Decuypere.
BNPP also lost no time in renewing its
sponsorship of local soccer team Anderlecht, with the BNP Paribas
Fortis name now appearing on the shirts.
“We have respect for long lasting
relationships and that is why we extended the deal with
Anderlecht,” she said.
Looking ahead, she also held out the prospect
of the Belgian subsidiary of BNPP supporting tennis, the sport with
which its parent bank is most associated (see RBI
592).
“We will look into [sponsorship of tennis]… It
would be no surprise if we get into tennis,” Decuypere said.
M-banking – a large
project
On the distribution side, Decuypere
said mobile banking, not currently offered by the Belgian arm, was
on the agenda.
“While it is not something you can just launch
in a matter of a few weeks, it is one of the opportunities we will
look at with BNPP. You will
see some interesting new developments in the area of distribution
channels,” she added.
As for product innovation, new savings and
investments offerings will be rolled out while, in the second half
of the year, the bank will release a new proposition for the youth
segment of the market.
And while the past 18 months has seemed to
present nothing but a litany of continuous bad news whenever Fortis
has appeared in the business press, Decuypere is extremely positive
about the bank’s prospects.
“It really is incredible how quickly people
from the various parts of BNPP, from France and from BNL in Italy,
have got round the table to speak in an open and constructive
atmosphere.
“Energy levels are high and already there are
lots of great ideas… it really is all very promising,” she
concluded.
A resilient set of
results
The French bank’s new management
benefited from a resilient set of results from Fortis Banque in the
first quarter, with net interest income of €1 billion comparable to
the previous quarter while fees and commission income increased by
3 percent to €0.5 billion. The bank’s retail unit reported pre-tax
earnings up by almost 40 percent at €746 million compared to the
fourth quarter of 2008 with deposits up by 2 percent. Overall,
Fortis broke even for the quarter while its Tier 1 ratio remained
relatively strong at 10 percent.
For the same quarter, BNPP reported
first-quarter net profit down 21 percent from a year ago to €1.56
billion, although the results were ahead of analyst
forecasts.
