The expansion, losses and sell-off of Paribas Nederland (1968-1997)

This period was without doubt the most difficult in the history of the former Amsterdam branch of the Banque de Paris et des Pays-Bas, which had now become Banque de Paris et des Pays-Bas N.V. From 1968 the Bank followed a very ambitious policy of expanding its business, which was now clearly oriented towards retail banking. However, due more to a surge of uncontrolled development than any real strategic error, the balance sheet grew twentyfold in as many years. This gives an idea of the pace of expansion which the Bank was not able to manage or control. It took a number of years to stabilise what was in fact a highly critical situation, but Paribas Nederland made a brilliant recovery from 1993 onwards.

Thus at the end of this period Paribas Nederland found the path back to profitability. However at that moment, the Paribas Group decided to abandon the retail banking business. This major change in strategy led to the sale of Paribas Nederland in 1997.

From uncontrolled expansion to losses (1968-1988)

In 1968, the workforce at Paribas Nederland just 115 staff, 23 of whom worked at Alcredis was rather small. Expansion took off the following year however, with the opening of offices in The Hague and Maastricht. The idea at that time was to open a branch in every city of over 100,000 inhabitants91. In 1973, the Bank had a network of 13 branches. Seven years later, the network numbered 30 branches and boasted 31 in 1982.

This rapid expansion of the network went hand in hand with a strong increase in headcount (including in the specialised subsidiaries). From 115 staff in 1968 the number grew to 345 by 1973 and reached 676 in 1985.

At the same time, business was booming and the balance sheet was expanding. The Bank had 284 million guilders on the balance sheet in 1968, and saw this grow to 668 millions within two years. In 1972, the balance sheet total reached the milestone of one billion guilders and by 1978 it was close to three billion. It would reach 5.7 billion in 1988.

This expansion, under the leadership of Willem Werner, who ran the bank from 1968 to 1982, was, to say the least, extremely fast.

When the Zwolle branch opened in 1979, Paribas Nederland explained its strategy in the following way: The opening of our 28th branch should be seen in the framework of the Bank s strategic plan to grow into a retail organisation. Through a large branch network

91. Note on the history of Paribas Nederland written in 1992 by Mr Visbeek, former head of the documentary department at the Bank in Amsterdam.

LETTERHEAD OF BANQUE PARIBAS NEDERLAND N.V.

The Bank s market share in 1978

The ranking of banks in the Netherlands by total balance sheet, not including savings banks and agricultural coop banks, allows us to see the position of Paribas Nederland.

1 - Amsterdam Rotterdam Bank (AMRO): 55 bn

2 - Algemene Bank Nederland (ABN): 52 bn

3 - Nederlandsche Middenstandsbank (NMB): 25 bn

4 - Mees & Hope: 6.7 bn 5 - Slavenburg s: 6.2 bn 6 - Pierson Heldring & Pierson: 3.7 bn 7 - Van Lanschot: 3.2 bn 8 - Banque de Paris et des Pays-Bas

Nederland: 2.9 bn

At 31 December 1978, total loans granted by Paribas Nederland represented 1.18% of all credit granted by all the Dutch commercial banks.

WILLEM WERNER

98 T H E H I S T O R Y O F B N P PA R I B A S I N T H E N E T H E R L A N D S