T H E H I S T O R Y O F A G L O B A L F I N A N C I A L G R O U P

bank, the Banque de Paris et des Pays-Bas ( Bank of Paris and the Netherlands ), usually known by its abbreviation, Paribas. And by an interesting twist of fate the two finance houses found themselves in 1899, together with the Belgian bank Société Générale de Belgique later to join the BNP Paribas Group under the name of Fortis embarking on a project to finance the construction of the Peking-Hankow railway, covering a distance of more than 1200 kilometres between modern-day Beijing and Hankou.

Paribas, a bank with strong European foundations

Paribas was founded in 1872 from the merger of a Parisian bank (Banque de Paris) with an international finance house which from the very outset was established in the Nether- lands, Belgium, Switzerland and France. The senior figures included several noted French bankers, such as Adrien Delahante and Alphonse Pinard, plus members of the Bischoff- sheim family from Germany and the Hentsch family from Switzerland. It was a quintes- sentially European bank, inheriting the traditions of high finance based on old banking families, and involved in large-scale transactions which required technical skill. These bankers were brought together by the desire to create a powerful financial institution capable of bidding against the Rothschilds to organise the second national Liberation Loan issue, a public subscription raised to pay France s indemnity following defeat in the Franco-Prussian War.

In contrast to CNEP s approach, Paribas did not have a branch network, working out of four offices in France, Belgium, the Netherlands and Switzerland and basing its busi- ness on alliances and on associate banks and companies which it had helped to set up. By steadily building its assets, Paribas became, by the early 20th century, France s top merchant bank.

During World War I, the BNP Paribas forerunners in France mobilised, alongside the other financial institutions, to encourage ordinary citizens to channel their savings into the war effort. Of course many bank staff also sacrificed their lives in the service of their country. By the end of the conflict, the French franc had lost a substantial part of its value, and this factor, together with the lines which were drawn across Europe, badly affected the position of Paris as an international financial centre. This meant that new sources of growth had to be found.

The inter-war period: a time for gathering strength

In 1913, the Comptoir d Escompte de Mulhouse, which found itself in German territory until 1918, established a French subsidiary, the Banque Nationale de Crédit (BNC), which would expand and later, in 1930, take over its parent bank. This daring and dynamic institution built up a network by buying a number of local French banks. In 1922 it merged with an international merchant bank, Banque Française pour le Commerce et l Industrie.

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