Philippe Bismut, head of BNP Paribas Lease Group, is
spearheading his company’s merger with Fortis Lease. When it
happens, he will be at the helm of Europe’s largest lessor. He
tells Jason T Hesse that
while size does not matter to him, he still expects single-digit
growth in 2010
From his office in La Défense, Paris’ business quarter, Philippe
Bismut says that he is pleased with how BNP Paribas Lease Group
(BPLG) has performed thus far in 2009. Although he estimates that
the lessor’s 2009 profits will be around two-thirds of 2008’s, he
views this as “a really good performance – it could have been far
worse”.
The chief executive officer of BNP
Paribas Lease Group since 2006, Bismut looks after BPLG’s
operations in the 20 countries in which the lessor operates.
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With a portfolio of over €20
billion, and new business over €10 billion last year, BPLG is
expected to become the largest European lessor when it merges with
Fortis Lease at the start of next year. But Bismut says that size
is not important to him.
“Customers don’t really care if
you’re number one, two or five in size. What we want to be is
number one for our value proposition – we want to be ahead of the
game not in size, but in terms of innovation and quality of
service. Size, revenue and profit is just the fall-out of that,” he
says.
In terms of its merger with Fortis,
BNP Paribas – the bank – will communicate its industry plans to the
market at the start of December, so Bismut cannot divulge much
until then. He does say that he expects the Fortis brand to be
phased-out, however.
“It is certainly an exciting but
complex project,” he says. “But it is being well managed, and for
us, it is an opportunity to strengthen our business in several
countries, and improve our coverage.”
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By GlobalDataThe lessor has its own taskforce to
work out the finer details of the merger between BPLG and Fortis
Lease.
This is no mean feat – while BPLG
has outstanding assets of around €21 billion, Fortis Lease also has
around €13 billion of assets. The two companies also have to find a
way to integrate Fortis Lease’s 700 employees into BPLG’s 2,500
employees.
“When there is a merger, it is
inevitable that there are jobs that are suppressed, but there are
also jobs that are created,” he explains. “That is what we’re
assessing at the moment, country by country, business line by
business line.”
But Bismut says he is looking
forward to the benefits that the integration will bring to his
business.
In addition to entering countries
such as Switzerland, where Fortis already has a presence but BPLG
does not, the lessor will also be able to leverage Fortis’
important banking presence in Belgium, Luxembourg, Poland and
Turkey.
“That will give a boost to our
business in those countries – the merger will make us an even more
international company, decreasing the weight of our French and
Italian businesses,” he explains.
“[Fortis Lease] will also bring some
skills and expertise in assets that we may not have, and will truly
strengthen our business.”
“Customers don’t really care if you’re number
one, two or five in size. What we want to be is number one for our
value proposition – we want to be ahead of the game not in size,
but in terms of innovation and quality of service”
The new-look business will focus
around three business lines, led by the bank channel. The other two
channels are the vendor business and direct business, through which
it gains access to larger corporate organisations.
Post-merger, Bismut says that one
quarter of the business will come from banks, around 13 percent
from direct business, and the rest from the vendor channel.
“The vendor channel is the
bread-and-butter of the business, it’s our mainstay,” he says. “The
goal is to embed our financial solutions into their product
proposition, to support their sales.”
For this, Bismut adds, BPLG can
either support vendors’ sales in a structured manner, such as a
joint venture, or in a vendor programme, where the two parties work
together to put forward a new proposition to the market.
BPLG already has significant
partnerships in the agricultural sector, such as with Claas, CNH
and JCB; and in office equipment, through Ricoh and Canon, for
example.
But, like all other lessors, BPLG
was faced with higher default rates in the last year. Bismut says
that he is proud of the way his team has handled the economic
turmoil, however.
“We had to beef up our resources,
including bringing in people who had experienced the 1992 crisis
out of retirement,” he says.
BPLG also moved some of its sales
staff into collections and brought in staff from its parent bank:
“Any sales guy should also be able to collect, and we also called
in teams from the bank to help negotiate debt rescheduling. It’s a
specialist business, so you can’t just improvise. You have to
manage your way through it.”
Turning to 2010, Bismut is slightly
bearish: “I do not expect a significant bounce in 2010. Although
the worst is behind us, I don’t see a v-shaped recovery. It will be
more of a u-shape, with no sharp increase in volumes next
year.”
Although he only expects
single-digit growth in 2010, he believes bad debt will remain
stable, and there will be increased pressure on margins with more
competitive pressure in the industry.
“We’ve been through tough times,
with a liquidity crisis that was absolutely phenomenal to absorb.
The industry now has to reposition itself, but I’m very optimistic
about the future because by essence, I think this product is what
the economy needs.”
