Tuesday 09 June 2020

BNP Paribas has begun its transfer of Deutsche Bank's Global Prime Finance and Electronic Equities unit. How will this benefit alternative asset managers?


The transfer of Deutsche Bank's Global Prime Services and Electronic Equities businesses to BNP Paribas will bring clients a winning combination of Deutsche Bank's advanced technology and capacity and BNP Paribas' strong credit rating, according to Olivier Osty, Head of Global Markets at BNP Paribas. Together with Ashley Wilson, Co-Head of the Global Prime Finance Transition Unit at Deutsche Bank, he has given an update on progress of this transaction signed in September 2019 that involves the transfer of key staff and technology to BNP Paribas to serve alternative asset managers.

Osty said that despite the Covid-19 pandemic, the migration plan remains resolutely "on track". The transfer of technology and key staff has not been impacted by the obligation to work from home over the past few months: indeed, more front office staff have so far been transferred than expected, including some key senior hires in IT and Operations.

Fast Start client programme even faster than expected

Moreover, in spite of three months of crisis, Wilson said "we have accelerated the project in some aspects", notably with the "Fast Start" programme now live in the US and Asia ahead of schedule. This programme enables clients to face BNP Paribas while executing using Deutsche Bank's electronic equities execution technology.

Since the agreement, some new clients have been signed onto Deutsche Bank's platform with the expectation of moving across to BNP Paribas by 2021. Osty said this shows that clients see the transition is progressing smoothly and they have confidence in the future integrated platform. Currently, clients can be onboarded by both Deutsche Bank and BNP Paribas.

Wilson added that a few early movers have already transferred, as BNP Paribas' current technology can meet all their needs. Other clients will migrate between the end of 2020 and 2021 as BNP Paribas continues to build up its technology infrastructure for the integrated platform.

Resilient, efficient and performing platforms

Through the crisis, despite remote working and a tripling of execution volumes in March and April, the execution platforms of BNP Paribas and Deutsche Bank have remained stable, with no outages or material issues, eliciting positive feedback from clients.

Osty said this showed how resilient, efficient and well-performing both platforms are, and added that throughout the transition they have remained dynamic, ensuring that leadership on execution is maintained.

Objective: top Prime Broker in Europe, meaningful service for clients

A first objective of the agreement to integrate the platforms is to become the largest Prime Broker in Europe, and to be in the top 4 globally over time.

For asset managers and hedge funds, a strong prime brokerage is key, as this is who they allocate most of their business to. The future combined platform will make BNP Paribas much stronger in this area.

However, this specific objective is part of a wider aim. "The whole purpose of this deal is not only to be the leader in Prime Finance but also to be one of the leaders – if not the leader – in alternative business for institutional investor and corporate clients," said Osty, adding that this is part of a global strategy to have an ever more "meaningful" relationship with clients.

Moreover, as US banks retrench and withdraw from prime brokerage in Europe, BNP Paribas has been stepping up to increase its overall market share in both Global Markets and Corporate Banking. And from an even broader perspective, Osty sees an opportunity for BNP Paribas Corporate and Institutional Banking to take on a leadership role in Europe. He says the trend is definitely positive and the crisis will probably strengthen it. Wilson added that clients are looking for a "strong European provider".

They concluded that the integrated platform sends out a strong message that BNP Paribas' management is committed to this business - a message which will doubtless resonate with both current and future clients.

Olivier Osty and Ashley Wilson were interviewed for the Financial Times.





Olivier Osty
Head of Global Markets at BNP Paribas
Ashley Wilson
Co-Head of the Global Prime Finance Transition Unit at Deutsche Bank
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