Jean-Laurent Bonaffé, the BNP's longtime 'introverted' boss

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Most CEOs may be tempted to step into the limelight if they have spent more than a decade running the eurozone’s biggest bank and outperformed crisis-hit regional rivals.

Not Jean-Laurent Bonaffé, who has moved far from the scene during his 12 years in charge of BNP Paribas.

“I’m just someone who succeeded someone else,” the 61-year-old told the Financial Times in a rare interview in Paris. “The bank was established in 1848 and will be around for a very long time. It’s a team.”

But although he may prefer to hide from view, Bonafé faces a set of challenges that will ultimately define his record at the French bank – not least in ensuring his own succession, even if the BNP’s bylaws allow him to Allow it to remain until 2028.

During a tenure that has included the eurozone crisis and the coronavirus pandemic, BNP’s shares have outperformed most of its European peers, but its price-to-book ratio of 0.54 is lower than HSBC and Santander, and notably most large lags behind stocks. American lender.

The bank has consolidated its position as one of Europe’s top corporate financiers and is ramping up its ambitions as the continent’s investment bank, overtaking once-powerful rivals Deutsche Bank and Barclays in terms of revenue. Although Wall Street banks still remain in the market. Leader.

As it seeks to deliver on the promise of higher returns over the next two years, Bonafé must now prepare the BNP for a green transition – a source of increasing scrutiny as climate campaigners press on it not to ditch fossil fuels fast enough. Alleges, brings lawsuits against the bank. And stick the elusive chief executive’s face on protest posters.

At the same time, BNP’s reputation is “stable”, with a series of regular quarterly profits over the past decade causing the bank to face a $9 billion fine in 2014 due to US sanctions. ,

“In a sector where it is hard to sleep comfortably, BNP is seen as a high-quality, safe organisation,” said Barclays analyst Amit Goyal.

Bonafé is more positive than some peers about the threat banks face from rapid swings to ultra-low interest rates in Europe and the US, as the industry has strengthened its security and regulatory buffers since the 2008 financial crisis .

This is despite growing warnings of an imminent decline in commercial real estate and company valuations, the collapse this year of Californian lender Silicon Valley Bank and the forced takeover of long-suffering Credit Suisse by its Swiss rival UBS.

“So far, yes, there were some isolated issues, but no major global problems,” Bonafay said. , the system will be in a very different shape.

During his time running the BNP, peace has been one of Bonafé’s trademarks.

“He has always been very self-contained,” said Olivier Andreas, chief executive of jet engine maker Safran and a former classmate at both the Polytechnique engineering school and the elite Corps des Mines, the training site for French civil servants. “I’ve never seen him fly off the handle.”

BNP insiders and rival bankers credit Bonafe for creating a tightly managed operation that has proved conservative on risks and costs, with some describing a highly hierarchical internal culture.

While French media refer to one of his nicknames as J’Lo, a riff on his shared initials with American pop star Jennifer Lopez, some employees took less flattering nicknames, including “Supreme Soviet”. Are.

Bonafé’s reserve belies his public persona, even though he is no stranger to establishment circles. Some French officials said he was a mystery to them, an anomaly for the head of a lender that was state-owned until the year of his joining in 1993 – at the start of a wave of French privatizations – and remains a bank. French government.

BNP, which remains France’s main primary dealer for government bonds, played a key role in arranging emergency state-backed loan schemes through French banks during the pandemic.

Born to a family in the southern city of Albi, Bonafé initially followed in the footsteps of his EDF engineer father in his studies.

At Polytechnique, a recruiting ground for blue-chip French companies, he worked side by side with other future European bankers, including Tidjene Thiam of Credit Suisse, Jean-Pierre Meustier of Unicredit and Frederic Audia of Societe Generale Were.

A lover of classical music, one of Bonafé’s few public activities is as head of the Friends of the Paris Opera, where he entertains large clientele. Another annual outing is the Roland-Garros tennis tournament. However, those who know him professionally have a hard time telling how he spends his free time.

“He is an introvert,” said a senior banker who has known him for years. “He won’t tell you what he did over the weekend, or only if you really force him.”

Corporate bosses are coming forward more. After a stint at France’s Ministry of Industry and Private Equity, Bonafé’s first assignment at BNP was to manage large clients.

Arthur Sadoun, who once advised the BNP on campaigns as a publicist, said Bonafé advised him when he became chief executive of advertising group Publicis in 2017.

“He spent a lot of time telling me ‘It’s going to be tough but you’ll get there.’

Rodolphe Sade, head of Marseille-based shipping group CMA CGM, described Bonafé as a straight talker: “He says things as he sees them. , , When something is not possible, he will say so.”

Bonafé made his mark by spearheading some of BNP’s biggest mergers, including a twin bid for Sokgen and Paribas in 1999 when he was head of strategy. Eventually the first proposal was dropped.

He later helped integrate Italy’s Banco Nazionale di Lavoro, which the BNP acquired in 2006, as well as Fortis’ operations in Belgium and Luxembourg. Internally, he has made no secret of how laborious the BNL deal was, as BNP had to contend with its poor quality loan book – a cautionary tale for other cross-border mergers.

Bonafé has since backed smaller deals, including the 2019 purchase of Deutsche Bank’s prime brokerage operation serving hedge funds, to boost its position in the equity markets.

He has emphasized that the 7.6 billion euro war chest set aside from the $16.3 billion sale of the US retail business will be spent on Bank of the West IT and systems upgrades and to build scale in areas such as asset management, insurance and consumer finance. to be spent on incremental acquisitions. ,

A diversified business from car leasing group Arval to wealth management arm has also helped BNP’s steady growth. BNP aggressively used its balance sheet during the pandemic, raising it by €500 billion in only a few months, to win debt-starved corporate clients across Europe, at a time when US rivals temporarily laid off.

The group projects a record €10.2bn annual profit in 2022.

When asked where he and the bank can go from here, Bonafe turned to the broader challenge facing lenders in the service of society, who must rapidly transition to a clean energy model.

He wants banks to be at the forefront of customers’ financing needs for new infrastructure, and insisted that the BNP is now reducing its support to the oil and gas sector – albeit at its own pace, and not that he has Said that “could kill the economy”.

“There’s a lot more to do,” Bonafay said. “If you look at how much investment we needed to make to implement change, the last time it was probably shortly after the second world war.”

It is not clear how long he will stay to see this. No son of the king of france So far posted in a bank which has a tendency to promote from within.

In the words of a rival banker, “The only real thing left for Bonaface to prove is to succeed in his exit, and to get out at the right time before it is deemed too long”.

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Most CEOs may be tempted to step into the limelight if they have spent more than a decade running the eurozone’s biggest bank and outperformed crisis-hit regional rivals.

Not Jean-Laurent Bonaffé, who has moved far from the scene during his 12 years in charge of BNP Paribas.