Jean-Laurent Bonnafe’s route to the top job at BNP Paribas SA led through Rome and Brussels, where he spent much of the last five years overseeing takeovers that turned the Paris-based lender into Europe’s largest bank.
Bonnafe, 49, will replace Baudouin Prot as chief executive officer, Chairman Michel Pebereau told the company’s shareholders at the annual general meeting in Paris yesterday. Prot, 59, will become chairman as Pebereau, who turns 70 in January, steps down. The changes are planned for Dec. 1.
Bonnafe won praise from investors for his handling of the purchase of Fortis units, which turned BNP Paribas into the biggest bank in the euro region by deposits and the largest in Europe by assets. BNP Paribas bought Fortis’s banking operations in Belgium and Luxembourg in 2009, after sidestepping the worst of the financial crisis.
He “executed purchases perfectly, and the best example is Fortis,” said Jacques-Pascal Porta, who helps manage about $570 million at Ofi Patrimoine in Paris and owns shares in BNP Paribas. “Now he will need a strategic vision. He will have Prot at his side and he inherits a healthy company, but it’s a challenge.”
His record of making acquisitions work dates back more than a decade. In 1999 and 2000, Bonnafe helped Prot and Pebereau as BNP, a formerly state-owned consumer bank, absorbed the investment bank Paribas SA after wresting it away from Societe Generale SA, its preferred partner, in a takeover battle. In 2006, Bonnafe was dispatched to Rome to head the acquisition of Italy’s Banca Nazionale del Lavoro SpA.
During the Fortis purchase, Bonnafe took part in the final all-night negotiations with Belgian officials in March 2009, teaming with Prot to hammer out the terms of the transaction in Prime Minister Yves Leterme’s office.
Bonnafe also headed BNP Paribas’s French retail-banking unit from 2002 to 2008 and became co-chief operating officer three years ago, in charge of all consumer-banking operations.
“No one enjoys as much internal legitimacy as Bonnafe does,” said Pierre Flabbee, an analyst at Kepler Capital Markets in Paris who has a “buy” rating on the stock. “He has been in charge of retail banking, developing the networks as both Pebereau and Prot have done. There is continuity.”
Bonnafe, a French-born engineer who graduated from Paris’s elite Ecole Polytechnique and Ecole des Mines, started his career at the Industry Ministry in 1986 and served as an adviser to Foreign Trade Minister Bruno Durieux in 1992 and 1993.
18 Years at BNP
He joined BNP in 1993, the same year as Pebereau and a decade after Prot. Unlike them, Bonnafe didn’t attend the Ecole Nationale D’Administration, whose graduates include former French Presidents Jacques Chirac and Valery Giscard d’Estaing.
An avid rugby fan, Bonnafe is married with two children. He is fluent in English and Italian, and also speaks some Romanian, Russian and Dutch.
Prot, who turns 60 later this month, graduated from French business school HEC in 1972 and from the Ecole Nationale d’Administration in 1976. He worked as an auditor at the Finance Ministry from 1976 to 1980 and held positions within the Industry Ministry from 1980 to 1983 before joining BNP that year.
Prot won a seven-month battle to acquire the Fortis assets in Belgium and Luxembourg in 2009. Under his tenure, BNP Paribas posted just one quarterly loss during the financial crisis.
“Pebereau is putting in his successors little by little and is going to hand the bank over to those who helped him build it,” said Anis Bouayad, founder of Paris-based advisory firm Strategie.Alliance. “Things are going well in terms of profitability, management and governance. This is a company that is setting the standard.”
BNP Paribas last week reported a 15 percent increase in first-quarter profit to 2.62 billion euros, beating analysts’ estimates. Societe Generale, France’s second-largest bank, said on May 5 that net income fell 14 percent in the period, hurt by a charge tied to its own debt and provisions resulting from political turmoil in Egypt.
BNP Paribas shares have risen 15 percent in 2011, outpacing the 1.9 percent increase of the 48-company Bloomberg Europe Banks and Financial Services Index. The stock has outperformed that of Paris-based Societe Generale every year since 2007.
Pebereau, who became head of Banque Nationale de Paris SA in 1993 as the lender was sold to the public, shook up the French banking industry with a $38 billion unsolicited bid for Paribas and Societe Generale in 1999 to block a friendly merger between them. BNP won Paribas while Societe Generale, led at the time by Daniel Bouton, evaded Pebereau’s grasp.