Cautiously Optimistic Despite a Challenging Environment
TMI Editor Helen Sanders in conversation with Baudouin Prot,Chief Executive Officer, BNP Paribas
With ongoing turbulence in Europe, how well equipped are corporates in Europe to deal with the challenges?
The corporate sector is overall in good shape, with most companies of all sizes managing their way through the crisis successfully, both from a cash flow and balance sheet perspective. Not only are we seeing a gradual, but certain recovery across Europe, but a significant number of corporates are also active outside Europe, benefiting from growth in fast-growing regions such as Asia and Latin America. Consequently, despite the market challenges, I am cautiously optimistic about prospects for European corporates.
With widespread concerns about the euro, what do you think the future of the currency is likely to be in the coming years?
I have no doubt that the Eurozone will emerge from the current period of challenge and change with the euro still intact. The countries that are facing the greatest challenges are dealing with the crisis in a way that seems very proactive, combining their own efforts, namely structural, fiscal and budgetary reforms, with financial assistance from the Eurozone.
Banking regulation,specifically Basel III, is a major issue for banks and corporates alike. What are your thoughts on the new rules and their implementation?
It is clear that the new capital and liquidity requirements will create a demanding environment for banks, which in turn will affect their corporate clients, particularly in terms of the volume of lending and its price. Now, however, the emphasis should move from developing new regulations to its implementation in the 20 major economies across the world, in order to create a consistent and robust regulatory framework.
In addition, there needs to be greater focus on improving the quality of individual supervisory authorities, as supervisory failures were a significant factor in many of the problems we have encountered in recent years.
I have no doubt that the Eurozone will emerge from the current period of challenge and change with the euro still intact.
The acquisition of Fortis has expanded BNP Paribas’ competitive position across Europe significantly. Do you foresee any further acquisitions in Europe or beyond?
Our strategy does not rely on acquisitions over the next few years, and we have no plans to replicate the scale of acquisition that we made with Fortis. Our priority is to continue with the integration project which is already proving so successful, and which is currently ahead of schedule. BNP Paribas has a formidable presence both within Europe and beyond, and between 2011 and 2013, we still have a lot to do to strengthen our market position, with a view to reaching new levels of customer acquisition and customer satisfaction across our corporate banking and cash management services.