The Banque de Paris et des Pays-Bas (“Bank of Paris and the Netherlands”), generally referred to from 1982 as Paribas, was a French
investment bank
Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort.
In finance, the purpose of investing is ...
based in Paris. In May 2000, it merged with the
Banque Nationale de Paris to form
BNP Paribas
BNP Paribas is a French international banking group, founded in 2000 from the merger between Banque Nationale de Paris (BNP, "National Bank of Paris") and Paribas, formerly known as the Banque de Paris et des Pays-Bas. The full name of the grou ...
.
History
Background
In the early 1820s,
Louis-Raphaël Bischoffsheim
Louis-Raphaël Bischoffsheim (; 22 June 1800 – 14 November 1873) was a German-born international banker and a member of the prominent Bischoffsheim family.
Early life
Louis-Raphaël was born on 22 June 1800 and was the eldest son of Nathan-Ra ...
founded a private banking establishment in
Amsterdam
Amsterdam ( , , , lit. ''The Dam on the River Amstel'') is the Capital of the Netherlands, capital and Municipalities of the Netherlands, most populous city of the Netherlands, with The Hague being the seat of government. It has a population ...
in his own name. His brother
Jonathan-Raphaël created a branch in
Antwerp
Antwerp (; nl, Antwerpen ; french: Anvers ; es, Amberes) is the largest city in Belgium by area at and the capital of Antwerp Province in the Flemish Region. With a population of 520,504, in 1827 before settling in
Brussels
Brussels (french: Bruxelles or ; nl, Brussel ), officially the Brussels-Capital Region (All text and all but one graphic show the English name as Brussels-Capital Region.) (french: link=no, Région de Bruxelles-Capitale; nl, link=no, Bruss ...
in 1836. Having married Henriette Goldschmidt, the daughter of
Frankfurt
Frankfurt, officially Frankfurt am Main (; Hessian: , "Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on its na ...
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 the (NCDB, "Dutch Credit and Deposit Bank"; french: Banque de Crédit et de Dépôt des Pays-Bas), which he had founded in Amsterdam: the
Bischoffsheim family
The Bischoffsheim family is a family of German-Belgian Jewish descent known for their success in banking. It can be traced back to Raphaël Nathan Bischoffsheim, an army contractor native of Tauberbischofsheim, in the Electorate of Mainz. The fami ...
thereby established a powerful multinational banking conglomerate.
Separately in 1869, a group of bankers and investors including
Adrien Delahante,
Edmond Joubert and
Henri Cernuschi, with the private bankers
Eugène Goüin
Eugène Goüin (1818 – 1909 in Paris) was a French banker and politician.
Life
Son of the minister Alexandre Goüin, he was member of the municipal council of Tours from 1848 and president of the Tribunal (1856–1879) and Chamber of Commerce ...
(
Tours
Tours ( , ) is one of the largest cities in the region of Centre-Val de Loire, France. It is the Prefectures in France, prefecture of the Departments of France, department of Indre-et-Loire. The Communes of France, commune of Tours had 136,463 ...
),
Adolphe-Ernest Fould
Adolphe-Ernest Fould (17 July 1824 – 13 February 1875) was a French banker and politician. He played a key role in the foundation of Banque de Paris (now part of BNP Paribas) and the Ottoman Bank. He was the son of Achille Fould, who served a ...
of the
Fould family
The Fould family is a family of French Jewish descent known for success in banking. It was founded by Beer Léon Fould, a wine-dealer's son from Lorraine, who moved to Paris in 1784 to establish a banking business. The name comes from the Hes ...
, E. et A. Schnapper Stern (
Paris
Paris () is the capital and most populous city of France, with an estimated population of 2,165,423 residents in 2019 in an area of more than 105 km² (41 sq mi), making it the 30th most densely populated city in the world in 2020. S ...
), Brugmann (
Brussels
Brussels (french: Bruxelles or ; nl, Brussel ), officially the Brussels-Capital Region (All text and all but one graphic show the English name as Brussels-Capital Region.) (french: link=no, Région de Bruxelles-Capitale; nl, link=no, Bruss ...
), Tietgen (
Copenhagen
Copenhagen ( or .; da, København ) is the capital and most populous city of Denmark, with a proper population of around 815.000 in the last quarter of 2022; and some 1.370,000 in the urban area; and the wider Copenhagen metropolitan ar ...
), founded the , with its headquarters near the Opera at 3 rue d'Antin, Paris.
Creation and initial growth
The two banks, ''Banque de Crédit et de Dépôt des Pays-Bas'' and ''Banque de Paris'', merged on January 27, 1872 to form the ''Banque de Paris et des Pays-Bas''.
During its first year of existence, the new bank joined forces with
Crédit Lyonnais
The Crédit Lyonnais (, "Lyon Credit ompany) was a major French bank, created in 1863 and absorbed by former rival Crédit Agricole in 2003. Its head office was initially in Lyon but moved to Paris in 1882. In the early years of the 20th c ...
to head the financial consortium set up to float one-third of the
Franco-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.
After a few years of collegial governance, the bank was chaired by 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:
*government loans for France, Belgium and their respective colonial empires;
*public loan issues in France or
Imperial Russia
The Russian Empire was an empire and the final period of the List of Russian monarchs, Russian monarchy from 1721 to 1917, ruling across large parts of Eurasia. It succeeded the Tsardom of Russia following the Treaty of Nystad, which ended th ...
(from 1888 onwards);
*issues for the
Balkan states (often in association with German banks), for the Scandinavian countries and for Morocco, with the creation of the
Moroccan Debt Administration
The Moroccan Debt Administration (french: administration de la dette marocaine), formally known as the ''Contrôle de la dette'' from 1904 to 1910 and after that as the ''Administration du Contrôle de la dette publique mahghzénienne'' (referrin ...
in 1904;
*issues in the 1880s and 1900s for Latin America (frequently in association with British houses such as
Barings Bank
Barings Bank was a British merchant bank based in London, and one of England's List of oldest banks in continuous operation, oldest merchant banks after Berenberg Bank, Barings' close collaborator and German representative. It was founded in 1762 ...
).
Developments in the 20th century
![Banque de Paris et des Pays-Bas - emprunt 1918](https://upload.wikimedia.org/wikipedia/commons/d/d2/Banque_de_Paris_et_des_Pays-Bas_-_emprunt_1918.jpeg)
During
World War I
World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
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).
The impact of inflation during the 1920s, combined with the reconstruction effort and moves to expand the bank's activities under the guidance of
Horace Finaly
Horace Finaly (30 May 1871, Budapest – 19 May 1945, New York City) French banker, was director general of the Banque de Paris et des Pays-Bas (Paribas) between 1919 and 1937. It imposed its policy and philosophy of its business by the enorm ...
(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
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
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 and
oil-shale.
Its
merchant-banking
A merchant bank is historically a bank dealing in commercial loans and investment. In modern British usage it is the same as an investment bank. Merchant banks were the first modern banks and evolved from medieval merchants who traded in commod ...
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.
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.
Claude de Kemoularia Claude de Kemoularia (March 30, 1922 – November 4, 2016) was a French citizen of Georgian descent whose career has been in the fields of banking and diplomacy. He served as Dag Hammarskjöld's personal assistant from 1957 to 1961. In the mid-196 ...
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 as
Bull
A bull is an intact (i.e., not castrated) adult male of the species ''Bos taurus'' (cattle). More muscular and aggressive than the females of the same species (i.e., cows), bulls have long been an important symbol in many religions,
includin ...
,
CSF,
Thomson Thomson may refer to:
Names
* Thomson (surname), a list of people with this name and a description of its origin
* Thomson baronets, four baronetcies created for persons with the surname Thomson
Businesses and organizations
* SGS-Thomson Mic ...
.
The bank was
nationalized
Nationalization (nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to p ...
in 1982 by the government led by
Pierre Mauroy
Pierre Mauroy (; 5 July 1928 – 7 June 2013) was a French Socialist politician who was Prime Minister of France from 1981 to 1984 under President François Mitterrand. Mauroy also served as Mayor of Lille from 1973 to 2001. At the time of his de ...
under President
François Mitterrand
François Marie Adrien Maurice Mitterrand (26 October 19168 January 1996) was President of France, serving under that position from 1981 to 1995, the longest time in office in the history of France. As First Secretary of the Socialist Party, he ...
, as part of a wave of nationalization that included five major industrial companies, thirty-nine depository banks, and the two investment banks
Indosuez 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 by
Jacques Chirac
Jacques René Chirac (, , ; 29 November 193226 September 2019) was a French politician who served as President of France from 1995 to 2007. Chirac was previously Prime Minister of France from 1974 to 1976 and from 1986 to 1988, as well as Ma ...
.
In 1998, Paribas acquired the French bank and subsequently renamed itself .
In 1999,
Banque Nationale de Paris and
Société Générale
Société Générale S.A. (), colloquially known in English as SocGen (), is a French-based multinational financial services company founded in 1864, registered in downtown Paris and headquartered nearby in La Défense.
Société 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, forming
BNP Paribas
BNP Paribas is a French international banking group, founded in 2000 from the merger between Banque Nationale de Paris (BNP, "National Bank of Paris") and Paribas, formerly known as the Banque de Paris et des Pays-Bas. The full name of the grou ...
.
Controversies
Oil pre financing
Historically, Paribas has been actively involved in the financing of oil markets and had strong relations with
Standard Oil
Standard Oil Company, Inc., was an American oil production, transportation, refining, and marketing company that operated from 1870 to 1911. At its height, Standard Oil was the largest petroleum company in the world, and its success made its co-f ...
. This was one of the reasons that Paribas was chosen in the funding agreement in the Iraq
Oil-for-Food Programme
The Oil-for-Food Programme (OIP), established by the United Nations in 1995 (under United Nations Security Council, UN Security Council United Nations Security Council Resolution 986, Resolution 986) was established to allow Iraq to sell Petrole ...
. The technique of oil pre-financing consists of loans secured on future oil revenues. It was developed in the 1970s by
Marc Rich
Marc Rich (born Marcell David Reich; December 18, 1934 – June 26, 2013) was an international commodity, commodities Trader (finance), trader, hedge fund manager, financier, businessman, and financial criminal. He founded the commodities company ...
and his
commodities brokerage Glencore
Glencore plc is a Swiss multinational commodity trading and mining company with headquarters in Baar, Switzerland. Glencore's oil and gas head office is in London and its registered office is in Saint Helier, Jersey. The current company was c ...
and has been designated by the
UN and the
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
as a cause of impoverishment of oil producing countries and as one of key phenomena of
kleptocracy
Kleptocracy (from Greek κλέπτης ''kléptēs'', "thief", κλέπτω ''kléptō'', "I steal", and -κρατία -''kratía'' from κράτος ''krátos'', "power, rule") is a government whose corrupt leaders (kleptocrats) use political ...
.
Paribas Luxembourg
Paribas Luxembourg was closely linked to controversial Iraq business man
Nadhmi Auchi
Nadhmi Shakir Auchi, ( ar, نظمي أوجي; born 11 June 1937) is a British-Iraqi businessman and billionaire, founding president of the Anglo–Arab Organisation, and the founder and chairman of General Mediterranean Holding (GMH), a conglom ...
. Links date back to the 1970s with the jointly controlled Continental Bank of Luxembourg. In early 1990, Auchi was the largest shareholder in Paribas with 12% share through Auchi's holding company
General Mediterranean Holdings or GenMed. He played a key role in Paribas involvement of the Iraq Oil of Food programme signed by
Saddam Hussein
Saddam Hussein ( ; ar, صدام حسين, Ṣaddām Ḥusayn; 28 April 1937 – 30 December 2006) was an Iraqi politician who served as the fifth president of Iraq from 16 July 1979 until 9 April 2003. A leading member of the revolution ...
and the UN. Auchi played a major role in the BNP Paribas merger.
Arms sales to Angola
Judge Philippe Courroye investigated the role played by Banque Paribas in the case of arms sales to
Angola
, national_anthem = " Angola Avante"()
, image_map =
, map_caption =
, capital = Luanda
, religion =
, religion_year = 2020
, religion_ref =
, coordina ...
in what became known as the
Mitterrand–Pasqua affair
The Mitterrand–Pasqua affair, also known informally as Angolagate, was an international political scandal over the secret sale and shipment of arms from Central Europe to the government of Angola by the Government of France in the 1990s. The sca ...
. 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 subsidiary ''Compagnie Bancaire'' said he was not aware of this case and the fees charged by Alain Bernard and Jean-Didier Maille.
References
Further reading
*
Archival documents of Paribas (annual reports) in Source d'Histoire
External links
*
{{Authority control
Defunct banks of France
BNP Paribas
Privatized companies of France