(Updates with CEO comments, details)
By Maya Nikolaeva
PARIS May 24 BNP Paribas plans to
increase the assets run by its fund management arm by 5 percent
a year to 2020 and speed up the development of the business in
Germany, China and the United States.
Banks such as BNP Paribas are making a push into asset
management because it is less capital intensive than banking and
less prone to rising capital requirements.
Some banks such as Credit Agricole have decided to rely more
on managing money than the traditional business of taking
deposits and making loans and are now playing a role in reducing
the number of players.
"As far as the consolidation of the asset management
industry is concerned, we are watching it with a lot of care and
interest," Frédéric Janbon, chief executive of BNP Paribas Asset
Management, told Reuters in an interview on Wednesday.
The new plan for the business, which had 416 billion euros
in assets under management (AuM) at the end of 2016, is focused
on faster growth, a new organization and improving its
investment platform in order to grow assets under management
organically by 5 percent per year, Janbon said.
Under Janbon, who has been with BNP Paribas since 1988 and
became head of the asset management business in late 2015, BNP
plans to prune its structure and product range and build scale
as the industry combats rising costs and increasing competition.
Although investors are increasingly shunning active fund
managers who promise to beat the stock market in favour of
cheaper, passive funds, which simply track it, BNP will continue
both active and passive asset management.
It also plans to rebrand BNP Paribas Investment Partners
(IP) to BNP Paribas Asset Management (AM) from June 1.
This brand will cover around 80 percent of its business,
while the rest, including local joint ventures such HFT
Investment management in China, will keep their own names.
BNP Paribas AM focuses on advisory and risk management
services for institutional clients, is targeting individual
investors with outcome-based retirement savings products and
aims to expand into digital, the bank said in a statement.
Its AuM have grown since 2014, after several years of large
net outflows, according to analysts at Fitch ratings. BNP does
not give a breakdown on revenue growth for the business,
however, wealth and asset management revenue was down 1.2
percent in 2016, versus growth of 7.4 percent in 2015.
Meanwhile staff numbers at BNP Paribas Investment Partners
fell by 3 percent in 2016 to 2,330.
The bank has a target for return on net equity from wealth
and asset management of 44 percent in 2020, from 33 percent in
2016, it said in a presentation to investors earlier this year.
(Additional reporting by Simon Jessop in London; Editing by
Sudip Kar-Gupta and Alexander Smith)