the Bank can more easily reach the smaller depositors, with the result that it will be less dependent on the capital market, with its relatively historically high rates . In fact, the Bank was resolutely committed to its retail banking policy and justified the size of the network on the grounds that it was necessary to obtain resources cheaply. A number of mass-market advertising campaigns designed to bring in more private savings were conducted between 1980 and 1983.

However, the Bank still remained active on the capital markets, helping to place a number of issues in guilders, the most noteworthy of which were, in 1972, on behalf of Pechiney Nederland N.V. and Total Raffinaderij Nederland N.V. In 1975 the Bank also began to develop a mortgage lending business, with a portfolio essentially managed by the branch in The Hague which specialised in this business that attained a value of 135 million guilders.

Expansion policy supported by Paris

Curiously, a note written in 1976 at the Amsterdam office is highly critical of the branch network policy, alleging that there was no development plan, no commercial policy and no human resources policy. We do not know in what context the document was written, but it is clear that the Bank s Paris parent unreservedly supported the policy being pursued in the Netherlands, as can be seen from one of the notes dated December 1979: It must be recognised that the expansion of our bank in the Netherlands has been remarkable and that the share of Banque de Paris et des Pays-Bas N.V. in the consolidated accounts of the Group have been continuously rising There is no doubt that the policy followed by W. Werner in creating a branch network in the large cities where we already have clients who were managed from Amsterdam has been a great success. In addition to the fact that it enables the bank to penetrate more deeply into the industrial and commercial fabric of the Netherlands, and also to find clients among small and medium- sized companies and institutions, we are the only foreign bank with a branch network.

Paribas Nederland was indeed, the only foreign bank to run a branch network but in 1976, even though it was the largest foreign bank in the country, its balance sheet still only accounted for 1% of the total of all bank balance sheets in the Netherlands. However, in 1979, Paribas Nederland s share in the consolidated accounts of the Paribas Group was quite substantial, accounting for 4.89% of deposits and 4.7% of loans. But the argument for building market share, which was often heard during the 1970s period of expansion, could not be maintained in the face of demands for profitability that came to the fore during the following years, and which resulted in a radical change of strategy.

The support which Paris headquarters gave to the branch expansion policy must be viewed in the context of the era. The fact is that a similar policy was being followed in France. After the French banking reforms of 1966-1967, which blurred the distinction between merchant banks and deposit-taking banks and reduced restrictions on the opening of bank branches in France, Paribas began to open branches across France from 1967 onwards in order to attract deposits.

Strong growth in the Paribas Nederland balance sheet

Total consolidated balance sheet in millions of guilders

1968: 284 1970: 668 1975: 1,321 1980: 3,661 1985: 4,902 1990: 6,953

Paribas Nederland as seen by BNP in 1975

In 1975, BNP was preparing to set up in the Netherlands. One of its fact-finding reports noted that Paribas Nederland s off balance sheet business accounted for a quarter of its balance sheet total and deduced from this that the Bank was active in international trade finance.

The same report stresses the need to ensure a stable source of capital through savings deposits which Banque de Paris et des Pays-Bas tends to do by increasing the number of branches it has.

Analysing the situation of foreign banks in the Netherlands, the author of the report clearly recognised the very Dutch nature of Paribas Nederland, writing: But is this really a foreign bank?

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