By 1978 the Bank had a network of around fifty branches in France. It is also worth pointing out that Paribas Belgique had also opened a network of branches in the late 1950s.

Issues of funding and refinancing

Inevitably the expanding balance sheet led to a greater need for capital. This need was partly met by successive share capital increases, lifting Paribas Nederland s capital to 30 million guilders in 1971, then to 40 million in 1976 and to 67.5 million in 1981. In addition, the Paris parent company provided a subordinated loan of 40 million guilders in 1982.

However, while it was clearly necessary to shore up the Bank s capital in this way, that still did not solve the thorny issue of having to refinance loans in an interbank market where funds were then very expensive indeed. In 1979, the Bank s assets, totalling 1.4 billion guilders, were only refinanced to the amount of 658 million by the bank s stable sources of funding i.e. basic capital plus savings accounts and other deposits. The remainder had to be covered by recourse to the interbank market at rates which put a severe damper on profitability. Thus the Bank s Asset Liability Management structure was fragile indeed.

Interestingly, it was a Dutch banker who in 1980 made this analysis of the constraints on the profitability of Paribas Nederland s operations in a confidential note. He underlined that the Bank had a very narrow profit margin indeed and that the percentage represented by commission was too low. In addition, he pointed out that an analysis of the 1979 results of the major Dutch banks showed that Paribas Nederland s Net Banking Income for that year had increased by only 2.5% although NBI had risen by substantially more at other banks (AMRO 11%, Rabobank 15.4% and ABN 7.5%). In addition, the amounts set aside for risks and reserves had declined at Paribas Nederland while they had been increasing at all the other banks.

This was how the bank s fragile financial equation was described, two years before the Paris parent company really understood the situation at its Dutch subsidiary.

Paribas Nederland s specialised companies

In parallel with the expansion of the branch network, the Bank also acquired a number of specialised firms. We have already mentioned N.V. Algemene Crediet en Discontering Maatschappij (Alcredis), a consumer credit specialist taken over in 1953. The Bank also managed B.V. Algemene Maatschappij voor Investeringscrediet en Exportfinanciering (Almafinex), established in 1960, Algemene Financieringsmaatschappij voor Vastgoed (Alfimava) and Assurantie Bedrijf Van Banque de Paris et des Pays-Bas (Asparibas), a brokerage and insurance company founded at the end of the 1960s.

The Sarphati Room

Seno Bril, who began his career with the Paribas Group at the Amsterdam branch in 1978, tells this anecdote and gives us some information on the Sarphati Room.

The Paribas Nederland luncheon room was called the Sarphati Room after the founder of the original Dutch bank, which later merged with a bank in Paris and thus became part of the Banque de Paris et des Pays-Bas.

Sarphati was a Dutch Jew and I found it fascinating that the Hebrew word Sarfati actually means French almost as if the merger with a French bank was somehow pre-destined!

The luncheon room at the head office of Paribas Nederland was the Bank s pride and joy. The Sarphati Room, like most of the building, was kept in its original antique style and the food was also up to French standards. The Bank s portier who welcomed all visitors in his three- piece blue suit also acted as the waiter during luncheons. I do not remember his name, but he had a spectacular typical Amsterdam sense of humor. Though he came from a humble background, he served the table with great ceremony, but would also whisper funny comments to staff members during lunch .

BANQUE PARIBAS NEDERLAND N. V. WINE LABEL - 1983

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