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What’s going on here?
BNP Paribas, tapped by Czech billionaire Daniel Kretinsky and two Wall Street firms, will advise on a $4.63 billion takeover of Royal Mail’s owner.
What does this mean?
This mandate highlights BNP Paribas’s ambition to be a major player in London’s competitive investment banking scene, usually dominated by UK and US banks. Investment banking sales were key to BNP Paribas’s 21% earnings growth in Q2. The Head of BNP Paribas Global Banking in the UK underscored their target to be a market leader. At the same time, the bank’s UK Country Head is aiming to help local businesses access international finance, spurring new business growth.
Why should I care?
For markets: A new contender emerges.
BNP Paribas ranked 15th by revenues in the UK investment banking sector in 2023, holding a 2.2% market share. Though down from 3.5% during the pandemic, the bank is strategically climbing ranks. Recent high-profile hires from Perella Weinberg Partners, JP Morgan, and UBS aim to strengthen its private equity and UK M&A teams. BNP’s leap from 130th to 36th in M&A league rankings from 2022 to 2023, and its position at 8th in 2024, underscore its rising competitiveness.
The bigger picture: Shaking up the status quo.
BNP Paribas is focusing on organic growth, steering clear of major acquisitions save for its 2022 purchase of Deutsche Bank’s prime brokerage business. Its corporate broking clients jumped from one to seven between 2020 and 2023, bagging notable names like easyJet and Coca-Cola Europacific Partners. This strategy is pushing BNP Paribas up the revenue rankings from 52nd to 47th this year. As a Morningstar analyst observed, BNP is enhancing its competitiveness with big bulge brackets, becoming a more favored corporate and investment bank in Europe.
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