BNP Paribas to simplify its wealth management structure

PARIS (Reuters) - BNP Paribas, France’s largest bank, plans to simplify the legal structure of its wealth management operations within the group in some of its branches in France and Asia, according to a statement by the FO banking trade union.

A BNP Paribas Bank logo is pictured outside its offices in Singapore's central business district January 7, 2016. REUTERS/Edgar Su

The move would fit with the bank’s broader plan to review operations, cut expenses and boost cross-selling, as compliance and regulatory costs weigh on profitability targets.

Under the wealth management project, BNP plans to fold the legal entity BNP Paribas Wealth Management SA, which stands for a Paris branch situated in the city centre, into the parent BNP Paribas SA. It plans to make similar moves with its branches in Hong Kong and Singapore, the FO union said on its website.

“The context of the merger is due to the decrease of net banking income, largely related to compliance and rules that change constantly,” the union said, adding management had no redeployment plans for the employees affected in Paris.

BNP Paribas declined to comment.

BNP Paribas Wealth Management is present in 27 countries and has 6,600 employees. The Paris branch, which mostly serves non-resident clients, employs 33 people.

BNP Paribas had 316 billion euros (239 billion pounds) in assets under management in its wealth management business at the end of September versus 331 billion at the end of June. It cited “good performance” in wealth management in European countries and Asia during third-quarter results.

Management also told unions that bonuses in the wealth management arm would remain “similar” to the previous year.

BNP hopes to consolidate leadership in wealth management in the euro zone and evolve into a first-tier bank in Asia, while benefiting from a high return on equity of near 50 percent and growing global wealth, according to 2014 investor presentation.

In 2015, high net worth individuals put 65 percent of their investable assets in private banks or other wealth management institutions, up 25 percent from 2009, according to a private wealth report published in September by Bain & Company.

However, European banks are adjusting their plans as a slowdown in China, difficult macroeconomic conditions, and tighter regulation weigh on profits.

Reporting by Maya Nikolaeva; Editing by Mark Potter