BNP Paribas to acquire HSBC’s German private banking arm

BNP Paribas has entered into a definitive agreement to acquire HSBC‘s private banking operations in Germany, a move that underscores the French lender’s ambitious expansion strategy in wealth management.

The deal, expected to close in the second quarter of 2025 pending regulatory approvals, aims to bolster BNP Paribas’ assets under management in the country to over €40 billion (approximately £35.3 billion).

Vincent Lecomte, BNP Paribas‘ Head of Wealth Management, emphasised the strategic importance of this acquisition, stating, “This acquisition will allow us to consolidate our position as the top player in private banking in the eurozone.”

He noted that the transaction would position BNP Paribas among Germany’s leading wealth management firms, particularly targeting the thriving small and medium-sized enterprises (SMEs) sector and high-net-worth individuals.

This strategic acquisition is particularly noteworthy against the backdrop of HSBC’s recent focus on cost-cutting and refocusing efforts under new CEO Georges Elhedery. In recent years, HSBC has divested from several Western markets, including the US and France, concentrating its efforts primarily in Asia, which it views as offering greater growth potential.

BNP Paribas, buoyed by the £12.7 billion sale of Bank of the West in the US, has been actively pursuing growth in wealth and asset management. Analysts at Citi noted that the acquisition would enhance BNP’s overall assets under management in the wealth sector by approximately 6 per cent.

“Germany offers strong growth potential for wealth management activities, most notably in the small and midsized business sector,” the bank stated.

Lutz Diederichs, CEO of BNP Paribas in Germany, described the development of the wealth management franchise as an integral part of the bank’s broader growth strategy within the German economy.

He stated, “Wealth management in Germany serves as an entry portal for our clients into the entire portfolio of services of the group, particularly in corporate and institutional banking, real estate, asset management, and securities.”

In August, BNP announced a €5.1bn deal (approximately £4.4 billion) for the investment management arm of insurer AXA, its largest acquisition using cash from its sale of Bank of the West.

In addition, it is spending money from its US sale on IT investments and share buybacks as well as earmarking areas such as insurance for growth.

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