BNP Paribas UK country head, Anne Marie Verstraeten, on Brexit, the UK economy, and building a sustainable future
Transcript
- AC:
- I am Alan Cameron and I would like to welcome you to our first Thinking Aloud podcast of the new decade. This is brought to you by BNP Paribas Securities Services and in this edition I am lucky enough to be joined by Anne Marie Verstraeten who is the country head for BNP Paribas in the UK.
- AMV:
- Good afternoon Alan
- AC:
- Welcome to our podcast
- AMV:
- Happy to be here
- AC:
- Maybe we could just begin by asking you a little bit about how you became the country head for BNP Paribas in the UK?
- AMV:
- Well, the UK has been my home base for more than twenty years now, since the 90’s I have worked out of London covering the UK corporate banking market and international markets for Fortis, the Belgian/Dutch bank which BNP Paribas acquired at the outset of the financial crisis, and this is how I joined the BNP Paribas Group. As an energy banker at the time, I was pleased to take up the post of country head in Canada for the BNP Paribas Group in 2010 after which I became head of BNP Paribas in the Netherlands. These experiences as bank CEOs prepared me well for the mandate that the bank proposed to me to return to the UK in 2016 as the country head.
- AC:
- We are at the start of a new decade which is always a good time to look ahead and I know that BNP Paribas has commissioned a report into what the UK will look like in the next twenty years and whether it will be a growing market and if so where that growth will come from. I was curious about this because nowadays everything seems to be much more short-term so is it a valid thing to do to look twenty years ahead?
- AMV:
- Well, you’re right and one of the reasons to commission this report is to look beyond the here and now. BNP Paribas has been present in the UK for over 150 years. Over those years the group has built a very nice base comprising of ten business lines which are present in London and across the country and span a broad range of activities such as the Corporate and Institutional Bank, Securities Services, Asset Management, Real Estate, Equity Research, Leasing, I could go on. It places us as a bank that is at the heart of the UK economy so tasked with a growth mandate, it really is a good thing to try to look ahead as we ponder our own strategy for the next years and decades as we engage with our clients in that context.
- AC:
- So this report was based on a survey of other companies and other people, but you are heading up BNP Paribas in the UK, and as you said we are very central to the UK economy. Can I ask you what do you personally see and what do you personally feel about what is going to happen in the UK in the next twenty years.
- AMV:
- So let’s start with the short term. The CEBR analysis has assumed an orderly Brexit and an adjustment of the UK economy to the new trading order and supply chains. There are of course global geopolitical impacts that not only the UK has to deal with, but what I see considering all of those points is that UK will likely remain a very robust and significant economy that is important for BNP Paribas in the UK where it features in our international development plans and with the businesses we have here, we have good indicators of how the developments are unfolding – particularly where the report mentions that innovation in science, technology, health and social care will be at the heart of the trends and that sustainability is going to be front and centre given the commitments that the previous UK government has made to net zero emissions by 2050 then I can absolutely understand how those innovations will drive the way in which sectors like science, admin and support (which the report brings out as the one that will expand the most rapidly in terms of gross value add) will be benefitting from those innovative changes.
- AC:
- So you mentioned sustainability, and we hear a great deal about that today particularly at BNP Paribas but at other banks and institutions as well, can you tell me a little bit about what it means to you from a practical point of view. How does it impact your job and the decisions you are having to make?
- AMV:
- Well you are right that it is becoming an all pervasive way of life and it is through the BNP Paribas Group and our CEO who has made some very fundamental choices to be a contributor to making the world a better place to live. So it is quite a few years back already that our group CEO decided that to contribute to a sustainable world there are things the bank would no longer do. Gradually exiting the tobacco sector was one of them, our asset management business has a timeline along which it will exit thermal coal, we have over the last few years been a leader in developing sustainable finance, we are partnering in the UK for example with housing associations granting what we call sustainability-linked loans where we give discounts on the interest that we charge if the housing association brings back some of its unemployed residents back into work and reinvests the interest savings into community projects.
- AC:
- So it sounds as if the role of running a bank in the UK is almost changing from being an institution to deploy capital effectively and profitably to something almost more akin to social engineering. Is that something you think bankers are competent for, that they have a mandate for, or indeed should do and who should be telling them what is desirable in this area or is it something that they are meant to just find out themselves?
- AMV:
- Well I go a step further, I don’t think it is a choice, I think it is an obligation. You are right that it is a fast changing situation and it is true that we need to do all of that [combining the effective and profitable deployment of capital with maintaining our obligations for a more sustainable world]. We can’t cherry pick, we need to make sure we continue to offer the solutions our clients expect, but we have to go beyond that. We now also have to transition to making what were traditional solutions, sustainable solutions in the future. Are we equipped for that? We are learning. We have to learn a lot but it is probably the first time in my career that I see that internally in the bank all of our employees want it so it is not just top down, perhaps it started with that when Jean Laurent Bonnafé made some fundamental choices to contribute to a sustainable world, but now everyone genuinely sees that is the only way we can go so people not only want it, they actually require it. It doesn’t happen overnight, for example the energy transition by its very nature will take a long time. There is a big energy mix which will be in existence for a long time but we need to start to accelerate the change in the energy mix and I meet a lot of clients who are looking to share our thought leadership and from there they can share with us the solutions that they come up with. It’s complex but it’s absolutely fascinating and it is the only way to go.
- AC:
- It sounds like there is a lot to be done in the years ahead. Do you believe that the business models that we have in the UK will be able to deliver as required?
- AMV:
- You are asking a very broad question so let me mention a few thoughts in that regard. I think the UK is a good place to conduct transformation. There is a deep talent pool, there is a highly appreciated education system, and there is a good ecosystem with a willingness to look forward and try new things. I think that a good environment to evolve, to transform and certainly in the financial sector we see not only in London but in Manchester, Leeds, we see a lot of innovation. Fintechs have sprung up in the UK and continue to develop. We as BNP Paribas in our Securities Service area, our markets area, are working with them and I think that will be increasingly part of the future model where organisations will insource competencies they may not have themselves. We all know that significant investments are required for some of those so looking for the most competent partner and insourcing their solutions is probably going to be a more cost effective way.
- AC:
- So we have been looking ahead quite extensively in this conversation, and I wonder, as we come towards the end, if could give me some insight into what you see this year? Is it going to be a good year for you? Is it going to be a good year for BNP Paribas? Is it going to be a good year for the UK?
- AMV:
- Well, I would say at this early start of the year that the indications are pretty favourable. We, as BNP Paribas, ended last year in a pretty good place and from the work we have done with all the business we have ascertained that they are well positioned and that they can grow.
As I mentioned earlier, with the UK government having committed to net zero emissions by 2050 it does mean that we have to accelerate these efforts and we can play a key role in that. The UK will host COP26 in Glasgow this November, this is for us a fantastic opportunity to accelerate our efforts with our clients to really contribute to the sustainable future and to take the place and assume the responsibility we have as a group to do just that.
- AC:
- Thank you for listening to this podcast brought to you by BNP Paribas Securities Services.
