„Our strength lies in the breadth of our business areas“
Mr. Diederichs, many banks consider Germany a key market. Why is Germany so important for BNP Paribas, and what are your ambitions here?
Germany's significance for us is straightforward: BNP Paribas is the largest continental European bank, and Germany is the largest economy in Europe. It is therefore logical for us to have a strong presence here. Our roots in Germany date back to 1947, making us not a foreign bank, but a European bank with deep ties to Germany. Our unique strength lies in diversification: we have a broad range of products, business sectors, and customer segments, which provides us with stability. Additionally, our decentralised structure is perfectly tailored to the German SME sector. With eight business centres across major German economic hubs, we can operate locally. Furthermore, we offer specialised services that other banks cannot match in scale, such as leasing, factoring, and mobility solutions through our fleet management.
Are you more diversified than German banks?
I believe so. We operate in more niches and business sectors. For example, we have our own insurance business via Cardif, whereas many German banks rely on partnerships. We also provide basic services through platforms that other banks do not cover. Our strength particularly lies in our breadth: from consumer finance to corporate investment banking, asset management, and securities services, we are leaders in many areas.
You mentioned SMEs. How do you compare to Commerzbank, which is traditionally considered the SME bank?
We focus on large, internationally oriented SMEs with annual revenues of at least 500 million euros. We deliberately leave the traditional SME business to German banks, which have a strong foothold there. Our clients are often capital-market-ready and/or operate internationally, even if they are not publicly listed.
You recently acquired HSBC's private banking business. What are your expectations?
This acquisition was a strategic opportunity for us. It strengthens our market position in an area where we were not yet a leader. It is a pure asset deal – we are taking over the portfolio and staff, which allows for a leaner integration. Our goal is to become a top player in the German wealth management and private banking sector through this acquisition. We are planning the closing for Q3 2025, and are working on a smooth integration of the two units.
How do you respond to increasing competition from US banks in Germany?
US banks have traditionally been strong in investment banking, but are increasingly active in areas like digital retail banking and asset management. We take this seriously, but our strategy is different: we are more rooted in the SME sector and less dependent on interest income. While the German banking market shrank by 1% from 2012 to 2021, we grew by an average of 8 to 9% annually. Our business model pays off here.
How do you plan to sustain these growth rates?
Given the current economic challenges, sustaining these rates would be ambitious and a significant achievement. Topics such as energy supply, geopolitical risks, and dependence on China concern not only our clients but also us. Nevertheless, we are focusing on targeted acquisitions and strengthening our position as a leading bank for sustainable investments.
Your revenues in Germany amounted to 2.5 billion euros in 2023 (Net Banking Income). What is your forecast for the current year?
We expect solid revenues for 2024 and are satisfied given the challenging conditions.
Sustainability is a central part of your strategy. How do you measure success in this area?
We measure sustainability, among other things, by the proportion of our portfolio classified as sustainable. BNP Paribas is one of the few banks worldwide with a positive ratio of sustainable to non-sustainable investments. At the same time, we finance transitional projects, such as Salzgitter's steel plant, which will be powered by green hydrogen in the future.
Critics point to your involvement in oil and gas projects...
We have long-term commitments that we cannot and should not break. Moreover, we believe we have the greatest impact by supporting companies in their transformation. For instance, we finance projects transitioning to green technologies. Without these investments, there will be no transformation.
How important is sustainability for your clients?
Sustainability is a strategic top priority for CEOs in Germany – comparable to M&A themes. Our clients increasingly understand that non-sustainable investments pose long-term risks. That’s why we work closely with them to promote sustainable projects and support their transformation. Sustainability and profitability are not contradictions, but are increasingly interdependent in the long term.
Where do you see challenges in financing the economy?
Germany faces enormous investment needs, particularly in sustainability and infrastructure. KfW estimates that 1 trillion euros will be required by 2045. Given the limited equity base of German banks, this is hardly achievable through loans alone. Therefore, most of it must be privately financed. A functioning European capital market is thus indispensable.
Why is progress on Capital Markets Union in Europe so slow?
Capital Markets Union often falters due to a lack of harmonisation in regulations, such as insolvency laws. Moreover, European markets are more fragmented and less liquid than those in the US, which deters investors. A quicker step would be to facilitate securitisation, to relieve bank balance sheets and free up capital for new loans. Securitisations are an important first step toward the Capital Markets Union because they are relatively easy to implement. However, it is a regulatory misstep that it is currently more attractive for banks to keep loans on their books rather than securitising them and placing them on the capital market. We need to lower capital requirements for securitisation to relieve bank balance sheets and free up resources for new loans. Greater use of securitisation would be a significant contribution to strengthening the European capital market.
