 | |
| Company type | Société anonyme |
|---|---|
| Industry | Banking |
| Predecessor |
|
| Founded | 27 January 1872 (1872-01-27) |
| Founder | Henri Bamberger,Adolphe-Ernest Fould,Eugène Goüin, Edouard Hentsch, Edmond Joubert,Henri Cernuschi |
| Defunct | 22 May 2000 (2000-05-22) |
| Successor | BNP Paribas |
| Headquarters | Paris ,France |
TheBanque de Paris et des Pays-Bas (French pronunciation:[bɑ̃kdəpaʁiedepeiba],lit. 'Bank of Paris and the Netherlands'), generally referred to from 1982 asParibas (French pronunciation:[paʁiba]), was a Frenchinvestment bank based in Paris. In May 2000, it merged with theBanque Nationale de Paris to formBNP Paribas.
In the early 1820s,Louis-Raphaël Bischoffsheim founded a private banking establishment inAmsterdam in his own name. His brotherJonathan-Raphaël created a branch inAntwerp in 1827 before settling inBrussels in 1836. Having married Henriette Goldschmidt, the daughter ofFrankfurt banker Hayum-Salomon Goldschmidt, Louis-Raphaël Bischoffsheim established the Bischoffsheim, Goldschmidt & Cie bank in Paris in 1846, then in London in 1860. In 1863 he merged these banks into theNederlandsche Credit- en Deposito Bank (NCDB, "Dutch Credit and Deposit Bank";French:Banque de Crédit et de Dépôt des Pays-Bas), which he had founded inAmsterdam: theBischoffsheim family thereby established a powerful multinational banking conglomerate.[2][3]
Separately in 1869, a group of bankers and investors including Adrien Delahante, Edmond Joubert andHenri Cernuschi, with the private bankersEugène Goüin (Tours),Adolphe-Ernest Fould of theFould family, E. et A. Schnapper Stern (Paris), Brugmann (Brussels), Tietgen (Copenhagen), founded theBanque de Paris, with its headquarters near the Opera at 3 rue d'Antin, Paris.[4]
The two banks,Banque de Crédit et de Dépôt des Pays-Bas andBanque de Paris, merged on January 27, 1872, to form theBanque deParis et des Pays-Bas.
During its first year of existence, the new bank joined forces withCrédit Lyonnais to head the financial consortium set up to float one-third of theFranco-Prussian War indemnity loan of 3 billion francs for the French government. The major part of the funds raised by Banque de Paris et des Pays-Bas came through its Brussels outlet as a result of the close relations established with certain German financiers.[5]
After a few years of collegial governance, the bank was chaired byFrançois-Ernest Dutilleul [fr] from 1876 to 1894, then by Goüin from 1895 to his death in 1909. During that period it led or participated in major government loans, and in share or bond issues for French and foreign private companies. Most noteworthy among these were:
DuringWorld War I it helped the French government raise funds through war loans, the 'Bons de la Défense Nationale', and it played its part in negotiations to open credit accounts for the French Treasury in Spain, the Netherlands, Switzerland and Sweden. It also helped to raise finance for the weapons industry (Compagnie Nationale de Matières Colorantes et de Produits Chimiques).[5]
The impact of inflation during the 1920s, combined with the reconstruction effort and moves to expand the bank's activities under the guidance ofHorace Finaly (at the head of the bank from 1919 to 1937) led to an increase in the banks capital and further investment in industrial concerns and public utilities.
World War II eroded its capital and the bank was cut off from its affiliates and correspondent banking partners in the allied countries. It lost a portion of its foreign assets in Central Europe and Norway. Nevertheless, it helped in the development of industrial patents for such products as alternative fuels, gas producing substances andoil-shale.
Itsmerchant-banking profile had enabled it to sidestep nationalization in 1945 and Paribas was able to take full advantage of the legislation of 2 December 1945 and 17 May 1946, which ratified the status of a full-service bank. The bank was thus poised to develop its activities freely in commercial banking for French companies and, before long, on an international scale.[5]
The 1960s to 1980 saw Paribas start an investment bank in New York which it expanded into an internal banking network with offices in a number of countries and started an asset management services to private and institutional clients.[5]Claude de Kemoularia was an important executive in the bank during this period. It also directs its activity towards businesses and participates in the development and restructuring of French industry including names such asBull,CSF,Thomson.
The bank wasnationalized in 1982 by the government led byPierre Mauroy under PresidentFrançois Mitterrand, as part of a wave of nationalization that included five major industrial companies, thirty-nine depository banks, and the two investment banksIndosuez and Paribas. That same year, the bank adopted its longstanding telegraph address "Paribas" for its brand and corporate identity. Paribas was re-privatized in January 1987 by the government led byJacques Chirac.
In 1998, Paribas acquired the French bankCompagnie bancaire [fr] and subsequently renamed itselfCompagnie Financière de Paribas.
In 1999,Banque Nationale de Paris andSociété Générale fought a complex battle on the stock market, with Société Générale bidding for Paribas and BNP bidding for Société Générale and counter-bidding for Paribas. BNP's bid for Société Générale failed, but its bid for Paribas succeeded. As a consequence, the merger of BNP and Paribas was completed one year later, on 22 May 2000, formingBNP Paribas.
Historically, Paribas has been actively involved in the financing of oil markets and had strong relations withStandard Oil. This was one of the reasons that Paribas was chosen in the funding agreement in the IraqOil-for-Food Programme. The technique of oil pre-financing consists of loans secured on future oil revenues. It was developed in the 1970s byMarc Rich and hiscommodities brokerageGlencore and has been designated by theUN and theWorld Bank as a cause of impoverishment of oil producing countries and as one of key phenomena ofkleptocracy.
Paribas Luxembourg was closely linked to controversial Iraq business manNadhmi Auchi. Links date back to the 1970s with the jointly controlledContinental Bank of Luxembourg. In early 1990, Auchi was the largest shareholder in Paribas with 12% share through Auchi's holding companyGeneral Mediterranean Holdings or GenMed. He played a key role in Paribas involvement of the Iraq Oil for Food programme signed bySaddam Hussein and the UN. Auchi played a major role in the BNP Paribas merger.
Judge Philippe Courroye investigated the role played by Banque Paribas in the case of arms sales toAngola in what became known as theMitterrand–Pasqua affair. Between 1995 and 1997, the bank clearing department, then headed by Alain Bernard, funded $573 million of arms sales between Russia and Angola, according to Judge Courroye's investigations. Jean-Didier Maille, Alain Bernard's deputy, set up the financing and the two men would have received $30 million in commissions in foreign accounts for their actions. During Jean-Didier Maille's hearing in the investigation he said "the management was aware Paribas activities ... Alain Bernard ... Everyone knew he was paying commissions ... We called these activities: Special Affairs." For its part, André Levy-Lang, CEO of Paribas subsidiaryCompagnie Bancaire said he was not aware of this case and the fees charged by Alain Bernard and Jean-Didier Maille.
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