BNP Paribas Partners with Datrix to Develop WellMakers

BNP Paribas, France's largest banking group, has partnered with Datrix around WellMakers. The banking group's net banking product breaks down into retail banking (52.1%), finance and investment banking (35.9%), and institutional and private management and insurance (11.7%). As of 2024, BNP Paribas managed EUR 1,034.8 billion in current deposits and EUR 900.1 billion in current loans, with 81.3% of its net banking product distributed in Europe, the Middle East, and Africa.

French financial conglomerate BNP Paribas SA has completed the acquisition of Axa Investment Managers, a division of insurance and investment company Axa SA, for 5.1 billion euros ($5.3 billion). This acquisition, reported in a press release from BNP Paribas, marks a significant strategic move for the company [1].

The combined entity, with assets of 1.42 trillion euros ($1.6 trillion) under management, positions BNP Paribas as one of the largest asset management companies in Europe. Axa Investment Managers manages 859 billion euros in assets, while BNP Paribas Asset Management manages 562 billion euros. The deal allows BNP to compete more effectively with European rivals such as Amundi SA and UBS Asset Management, although it still lags behind American giants like BlackRock Inc. and Vanguard Group Inc. [2].

The acquisition was initially planned to leverage the "Danish Compromise," a capital treatment that reduces the capital burden on insurance-related transactions. However, the European Central Bank (ECB) refused to recognize the validity of this compromise, leading to a higher capital hit than initially expected. BNP Paribas subsequently cut its forecast for returns from the deal and expects the hit to its common equity tier 1 (CET1) ratio to be around 35 basis points, worse than the initially expected 25 bps [2].

The combined company is expected to generate a return on invested capital exceeding 14% in 2028 and 20% in 2029. The funds will be directed towards more profitable markets such as private lending, infrastructure, and real estate investments, as well as share buybacks and growth financing. BNP Paribas is also considering combining its business with divisions of other competitors as part of the trend towards asset consolidation [1].

The integration of Axa Investment Managers will be led by Sandro Pierri, CEO of BNP Paribas Asset Management, with Marco Morelli, current Executive Chair of AXA IM, becoming the new chair of the combined entity. BNP Paribas, one of the "big four" banks in France, is a leading EU bank with headquarters in Paris and offices in 65 countries. Axa SA, one of the world's largest insurance and investment companies, has a significant presence in Europe and the Asia-Pacific region [1].

References:
[1] https://www.akm.ru/eng/news/french-bnp-paribas-completes-acquisition-of-axa-investment-managers-for-5-1-billion-euros/
[2] https://www.marketscreener.com/quote/stock/BNP-PARIBAS-4618/news/BNP-Paribas-completes-AXA-IM-acquisition-in-talks-with-supervisors-on-capital-hit-50386786/