Shanghai and India in 1860 to finance cotton imports into France. Branches also opened in Australia in 1881 in response to demand from the wool industrialists in the north of France and in Mazamet, in southern France.

Banking at this time was still a fragile industry, suffering frequent crises. CNEP itself went through a serious crisis in 1889. It was immediately re-founded and commenced doing business again under the prudent management of Alexis Rostand. The strong risk culture he inculcated at that time has come down to us through the decades.

The period from 1870-1914 saw a surplus of savings in France, and Paris rivalled London as a financial centre at that time. CNEP built up a reputation in the financial markets for the management and placement of both sovereign and corporate bond issues and the issuance of company stocks and shares.

On the banking syndicates which were put together to raise the capital necessary to finance large projects, CNEP often found itself in the company of a major French merchant bank, the Banque de Paris et des Pays-Bas ( Bank of Paris and the Netherlands ), usually known by its abbreviation, Paribas. And by an interesting twist of fate the two finance houses found themselves in 1899, together with the Belgian bank Société Générale de Belgique later to join the BNP Paribas Group under the name of Fortis embarking on a project to finance the construction of the Peking-Hankow railway, covering a distance of more than 1200 kilometres between modern-day Beijing and Wuhan.

Paribas: a bank with strong European foundations

Paribas was founded in 1872 from the merger of a Parisian bank (Banque de Paris) with an international finance house which from the very outset was established in the Netherlands, Belgium, Switzerland and France. The senior figures included several noted French bankers, such as Adrien Delahante and Alphonse Pinard, plus members of the Bischoffsheim family from Germany and the Hentsch family from Switzerland. It was a quintessentially European bank, inheriting the traditions of haute banque based on old banking families, and involved in large-scale transactions which required technical skill. These bankers were brought together by the desire to create a powerful financial institution capable of bidding against the Rothschilds to organise the second national Liberation Loan issue, a public subscription raised to pay France s indemnity following defeat in the Franco-Prussian War.

In contrast to CNEP s approach, Paribas did not have a branch network. It worked out of four offices in France, Belgium, the Netherlands and Switzerland and based its business on alliances and on associate banks and companies which it had helped to set up. By steadily building its assets, Paribas became, by the early 20th century, France s top merchant bank.

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