(Bloomberg) -- BNP Paribas SA, the French bank facing a potential $10 billion U.S. penalty over its dealings with sanctioned countries, said its sticking with a plan to expand its BancWest division.
BancWest, which opened a private-banking flagship office in San Francisco less than two years ago, will hire almost 100 wealth-management advisors through 2016, Sofia Merlo, co-head of wealth management at BNP Paribas, said in an interview yesterday in Paris. That businesss current staff is about 200 with more than $7 billion under management, Merlo said.
BancWest operates essentially in West Coast states and we also envision being in New York, Merlo said. Two years ago we were less well-known, and today we manage to lure people from very big banks. We are hiring a lot. She declined to comment on the U.S. case.
U.S. authorities are seeking a guilty plea and more than $10 billion -- a record criminal penalty -- over BNPs dealings in sanctioned countries including Sudan and Iran, a person familiar with the matter said May 29. New York States top banking regulator, Benjamin Lawsky, has also threatened to suspend the banks dollar-clearing ability, a person familiar with the matter has said. The bank has said its cooperating with the probe.
BNP Chief Executive Officer Jean-Laurent Bonnafe, 52, said at the companys annual meeting last month that it makes no sense to link BancWests activities to the probes. BancWests private banking is on track to meet 2016 targets, Merlo said.
GROWTH TARGET
Targets include increasing private-banking assets under management by 7.5% on average annually through 2016, the company said in March. BNP, which didnt provide details of private-banking goals by country, said it aims to ensure a strong development in markets such as the U.S., Turkey, Morocco and Poland.
The bank told shareholders at the May 14 annual meeting that a settlement with U.S. authorities could be significantly more than the $1.1 billion it had set aside for the case.
BNP Paribas said in 2012 that it combined trust, brokerage and private-banking at its BancWest unit as it seeks to manage more money for wealthy people in the worlds largest economy.
Worldwide, BNP Paribas provides wealthy customers with investment advice and services related to business succession, retirement, real estate, art and philanthropy. The wealth- management business had 296 billion euros ($401 billion) under management at the end of March.
BNP Paribas, which started its U.S. wealth-management business from scratch, is very pragmatic in opening new private-banking centers at BancWest, Merlo said. We need to be in the right place and find the good locations.
BancWest has about 10 private-banking centers, including offices in Los Angeles, Denver and Pasadena, California. It plans to open an office in Palo Alto, California, and is looking to start wealth-management operations in New York in 2015 as it awaits local banking licenses, she said.
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