Bank Brussels Lambert
Bank Brussels Lambert
Assets: BFrl.8 trillion (US$48.4 billion)
Stock Index: Brussels Antwerp Ghent Liege
Belgium’s second largest commercial bank, Bank Brussels Lambert (BBL) was created in 1975 by the merger of Banque de Bruxelles and Banque Lambert. Separately, each bank had survived more than a century of Belgium’s often chaotic and war-torn history, and together they now face the more orderly but equally challenging unification of the European market and the intensified competition it will bring. An international orientation is nothing new for Belgian banks, however; situated at the economic crossroads of Europe, Belgium has of necessity always depended on foreign trade, for that reason developing a group of unusually cosmopolitan banks and bankers. Neither Banque de Bruxelles (BB) nor Banque Lambert (BL), for example, was founded by Belgian natives, and throughout their history both were actively involved in the often-byzantine windings of international monetary exchange. From the funding of the rubber trade in Belgian Congo to the day when all of Europe uses one currency, BBL will have maintained a consistently internationalist approach to its task of providing both the Belgian government and private industry with a reliable source of capital.
The precursor to Banque Lambert was founded in Brussels shortly after Belgium won independence in 1831. At that time, the enterprising Rothschild family opened its first Belgian office, adding, within a few years, a second bank in Antwerp under the direction of Samuel Lambert, a Frenchman born in Lyon in 1811. When the head of the main Rothschild branch in Brussels died, Lambert was named as the Rothschild’s manager for all of Belgium. Samuel was succeeded by his son Léon Lambert, who moved the bank offices to the elegant former residence of the Marquis d’Ennetiéres in 1883 and solidified his ties to the Rothschilds by marrying a woman from the French side of that family. Léon furthered his aristocratic aspirations by working closely with the king of Belgium, Léopold II, in financing the king’s venture into what became the Belgian Congo. For his help in this colonial experiment, Lambert was made a baron, a title inherited by his son Henri when the latter assumed command of the bank after World War I. Baron Henri Lambert took advantage of the booming economy of the mid-1920s to split away from the Rothschilds and form his own company, Banque Lambert. His first customers were friends of the family, and the bank remained a selective and largely aristocratic institution during its first decades.
When the Nazis occupied Belgium, the Lamberts were forced to flee to England and the United States, and it was not until 1949 that a second Léon Lambert, Henri’s son, took control of the bank which bore his name. With the 1953 acquisition of la Banque de Reports et de Depots, BL entered a phase of more aggressive expansion, especially into foreign trade and stock exchange funds. In 1972, a young associate manager at BL named Jacques Thierry steered the company to a merger with Brufina, the large industrial investment holding company formerly a part of Banque de Bruxelles. Thus introduced, the two banks quickly realized that they themselves could benefit from a merger, and in 1975 BBL was formed, with Thierry as president. Fourteen years later, Thierry remains chairman of the combined board of directors.
Banque Lambert’s new partner had been in business since 1871. In that year, a young Venetian with the appropriately pan-European name of Jacques ErreraOppenheim took advantage of Belgium’s central location and relatively open economy by founding a large new bank in Brussels. With a group of German and Dutch financiers, he created the Banque de Bruxelles, capitalized with the unusually large sum of BFr50 million. The bank sold government bonds and lent to both private business and the government, but after a few profitable years it was caught in the slump of 1875-1876 and rapidly lost the confidence of its largely German investors. BB was forced to liquidate and reform itself as a smaller entity with the same name, after which it proceeded to grow quickly. BB was a “mixed” bank, active as both a depository for the savings of businesses and individuals and as an equity investor in the industrial sphere—since a large percentage of Belgian assets were still tied up in land, banks had to scramble for the relatively small amount of capital in circulating form.
After weathering the worldwide recession of 1890-1893, BB accelerated its investments in heavy industry, taking significant positions in the steel, coal, transportation, and electric power industries. Its total assets grew at a tremendous pace during the decades leading up to World War I—from BFr39 million in 1877 to BFr628 million just before the war. Many of these assets were tied up in foreign and colonial investments, since BB also took an active role in Belgium’s imperial ambitions.
World War I required of BB a greatly increased involvement in the public sector, as it joined the other Belgian banks in trying to keep up with the payment of war indemnities and the floating of interprovincial loans. In a remarkable demonstration of the international nature of modern capital, in 1916 BB took over the Banque Internationale de Bruxelles, an institution owned by Germans, the power that then occupied Belgium. BB also helped to form the new Banque de Louvain, and in general came through the war in excellent financial condition, its assets nearly doubling to BFrl.2 billion.
In 1919, Maurice Despret became the new chairman of BB, bringing with him an ambitious plan for expansion. Despret first created a widespread network of retail branches throughout Belgium and in the Congo, gradually bringing these under the centralized administration of five geographical groups. The chairman also pursued further investments in heavy industry, setting up six new corporations that were later collected into two holding companies, Electrobel and Companie Belge pour I’industie. Finally, Despret tried to improve BB’s overseas connections, working hard to organize the bank’s holdings in the Congo as well as seeking new business in Europe and America. In the excellent business climate of the 1920s, these steps were extremely successful, and total assets and profits both rose rapidly despite a number of minor setbacks. At the close of the decade, BB’s assets were nearly ten times what they had been at the end of the war, inspiring the confidence and over-speculation which came to an abrupt halt in October of 1929.
The Belgian economy muddled through the first few years of the Depression with some success, but by 1934 the country was nearing a general panic and the van Zeeland government was forced to take action. Since the public at large felt that banks were responsible for the Depression, van Zeeland and his finance minister, Max-Leo Gérard, set out to reform the country’s antiquated banking system. One part of their reform was aimed at mixed banks like BB. To satisfy critics who suspected, quite reasonably, that companies owned by banks received undue consideration from their parents, it was declared that all banks would have to restrict themselves either to investment banking or to the deposits and loan business. On December 28, 1934, therefore, the Banque de Bruxelles’ investment portfolio became Brufina, a new corporation, while its deposits-and-loan business was taken up by a newly formed Banque de Bruxelles. The companies are required by law to remain separate entitles, but over the years they have continued in close association.
Though these reforms may have helped the banking industry, they did little to solve the basic weakness of the economy, which continued unchanged until World War II erupted in 1939. As in the first war, Belgium spent years under foreign occupation, suffering the combined problems of massive deflation and German demands for equally massive war indemnity payments. BB tried to help the government make these payments, but the period up to and following liberation in 1944 was at best precarious. BB was aided during this bleak struggle by the leadership of former Finance Minister Gérard, who became the bank’s chairman in 1939 and remained in that capacity until 1952. Gérard steered the bank through the difficulties of war and the equally challenging task of postwar monetary reform, when Belgium’s currency was completely revamped and various other economic reforms were enacted.
Banking in Belgium had evolved into quite a different business than it had been before the reforms of 1934. These, and, to a lesser degree, reforms enacted immediately after the war, made banking into what a later chairman of BB would call ”presque public” —almost a part of the public sector economy. Reacting to the chaos of the private sector during the Depression, the government decreed that all banks had to keep 65% of their deposits available for loans to the state, which was busily setting up nationalized industrial combines. This program, though stringent by American standards, was readily accepted by Gérard and BB as the Belgian economy accustomed itself to the idea of close cooperation between state and industry. As the repository of capital needed by both partners, the banks became part of a comprehensive planned economy rather than remaining independent agents. The mixed economy thus evolved seems to have worked well for all concerned, and not least the banks. To hold up its end of the bargain with government and industry, BB was forced to raise its capital sharply, from BFr200 million in 1945 to BFr700 million in 1951 and to BFr2.5 billion by 1964; profits have also increased, if not quite proportionately, at least in a continuous upward spiral.
Overseeing the postwar expansion was Louis Camu, chairman since Gérard’s retirement in 1952. To take advantage of the greatly increased deposits made by a more prosperous public, Camu designed a program of expansion in both the national and overseas markets. Though prohibited by the reforms of 1934 from holding equity in other companies, BB furthered its expertise in the analysis and management of business affairs, seeking in that way to become more useful to its private borrowers. In 1953, BB introduced its first certified deposits, part of an effort to win a greater share of the retail-banking business across the country. BB has been in the vanguard of the electronic revolution in banking, offering its first automated teller machine as early as 1969 and continuing to upgrade its extensive computer facilities as a matter of course. On the international side, BB participated in the ever-expanding foreign investment and monetary exchange of the Belgian banks. In the mid-1960s, BB entered into special cooperation agreements with two of the world’s largest banks, Barclays of London and Chase Manhattan in New York; and in 1971 it was asked to join the influential European banking syndicate, Société Financiére Européenne. In a world growing ever more complex and interdependent, BB has positioned itself to take advantage of the coming changes.
Most important, of course, was the 1975 merger with Banque Lambert. By combining the assets and experience of two of the country’s leading banks, BBL strengthened its chances of surviving the gradual economic unification of Europe. With trade barriers gone, European bankers will soon be pressed by rivals from across the continent as well as by their traditional local competitors, and the battle for deposit-and-loan dollars will no doubt be prolonged and bitter. In anticipation of this struggle, Chairman Thierry has reorganized the bank according to five market segments—households, private investors, the Belgian corporate sector, multinationals, and institutional investors. In making this change, however, Thierry has emphasized that the bank is preparing not merely for the 1992 opening of the European market, important as that will be. The chairman is thinking mainly of the date, as yet unknown, yet all but certain, when all of Europe will convert to a single currency—an event which, if nothing else, will be certain to keep BBL and the rest of the European banking community more than a little busy.
Locabel-Fininvest (50%); Banco di Roma (Belgio) (50%); Lanson Industries Plant II (90.1%); BBL Capital Management Corp.; Ciabel (99.8%); Sogerfin; Banque Bruxelles Lambert (Switzerland); Banque Louis-Dreyfus (France); BBL Australia; Williams de Broe Hill Ltd. (61.8%) (U.K.); Finanziaria ICCRI-BBL (50%) (Italy); Credit Europeen Luxembourg; BBL Finance Ireland; BBL Curran Mullens Ltd. (95%) (Australia).