PARIS |
(Reuters) - In the spring of 1999, Michel Pebereau, chief executive of Banque Nationale de Paris (BNP), gathered a dozen of his top bankers to propose an audacious plan to buy not one, but two rivals and create a French national champion.
It was a big gamble for the one-time top civil servant. Having overseen the state's sale of its stake in BNP (BNPP.PA), he now sensed an opportunity to create a dominant player by snapping up investment bank Paribas and retail rival Societe Generale (SOGN.PA).
"It was a race to be the biggest," recalled one of the bankers present at the meeting.
Pebereau failed to win SocGen, but he got Paribas.
This served as a springboard for BNP's ten-year transformation into one of the world's largest banks with assets of around 2 trillion euros ($2.7 trillion), equivalent to about a year of French GDP, and a reputation as a risk-averse sector monolith that emerged from the 2008 financial crisis virtually unscathed.
More than a decade on from that meeting, a euro zone debt crisis rages and the 69-year-old prepares to step down as chairman on December 1.
BNP's size and its business model are no longer perceived as ironclad. Its shares are trading at half their book value after heightened eurozone fears this summer forced French banks into announcing sweeping asset sales.
And the once-widespread view of Pebereau as a banking Midas has been undermined by the possibility that BNP and its peers could be forced to take state funds as part of a plan to shore up Europe's banks, as Greece threatens to lurch into default.
"BNP is like the Roman Empire. And the barbarians are at the gates," as one analyst puts it.
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