Pébereau, Michel 1942–
Chairman, BNP Paribas
Education: École polytechnique, 1961; École nationale d'administration, 1967.
Family: Brother of French financier Georges Pébereau; married Agnès (maiden name unknown).
Career: Ministry of the Economy and Finance, 1970–1974, Inspecteur Général des Finances; Ministry of the Economy and Finance, 1971–1982, representative subdirector, assistant director, and head of service at the Treasury Directorate; Ministry of the Economy, 1978–1981, director of the cabinet and representative; Crédit commercial de France, 1982–1987, managing director; 1987–1993, chairman and chief executive officer; Banque nationale de Paris (BNP), 1993–2000, chairman and chief executive officer; Paribas, 1999–2000, chairman; BNP Paribas, 2000–2003, chairman and chief executive officer; BNP Paribas, 2003–, chairman.
Awards: Honored as the European Banker of the Year, Group 20+1, 1994; named Strategist of the Year, La tribune, 2001; named Financier of the Year, ANDESE, 2001; made a Commander in la Légion d'honneur, French government, 2004.
Address: BNP Paribas, 16, boulevard des Italiens, 75009 Paris, France; http://www.bnpparibas.com.
■ Michel Pébereau was the CEO of BNP Paribas, one of the world's largest banks and the second largest in the Eurozone. Pébereau made headlines in the late 1990s for attempting to accomplish what his predecessor could not, creating the largest bank in France through acquisitions and mergers. In particular, Pébereau sought a cross-border candidate to create the world's largest bank. With a background in the Ministry of Finance, Pébereau was poised to combine business acumen with a diplomatic twist.
POISED FOR BECOMING THE WHO'S WHO OF FRENCH BANKING
Michel Pébereau was born in Paris, France, on January 23, 1942. He and his older brother, Georges, were both destined for lucrative careers in the finance industry. Their father drilled mathematics into them at an early age, forcing Pébereau to sneak his favorite diversion, reading, past his mother at bedtime. Reading remained a passion for Pébereau throughout his life. He especially enjoyed the science fiction of Eastern European writers and even wrote science fiction reviews for La Recherche magazine. He told Financial News that science fiction "allows my imagination to go into a different world which is such a change from the day-to-day realities" (June 18, 2001).
As teenagers the brothers attended the École polytechnique, an elite private school known for guaranteeing a high-profile career. Pébereau praised the school for offering unlimited career opportunities following graduation. When he joined the rugby team, Pébereau found a spirit of unity among his teammates. In addition to science, language, and humanities courses, Pébereau said he had a great deal of spare time that allowed him to further himself and pursue other interests. This included reading the classics, especially the works of Honoré de Balzac. In order to return to the school something of what he believed it had given him, Pébereau later taught seminars in economics and international politics at École polytechnique and became a member of the board of regents. He believed strongly in the values that the school instilled in students, remarking, "The preparation for the entrance exam and the studies at Polytechnique have always given students invaluable qualities: the ability to quickly absorb new concepts, the capacity to work hard and fast, and the ability to formulate a precise analysis and synthesis of a question or problem" ("Alumni Interview: Michel Pébereau, X1961: BNP Paribas President"). Upon graduating from École polytechnique, Pébereau entered the École nationale d'administration, positioning him for a lucrative career in government.
LEARNING THE INS AND OUTS OF THE FINANCE MINISTRY
After graduating from École nationale d'administration in 1967, Pébereau became an inspector with the Ministry of Finance. After three and a half years, he joined the cabinet of Valery Giscard d'Estaing as financial minister. His tenure became a trial by fire; three years into the position, during an economic crisis, Pébereau was given the tasks of integrating the treasury and taking charge of the CIASI (the Interministerial Committee for Improving Industrial Structures), which negotiates between financially struggling companies and their creditors to avoid liquidation. The negotiating skills he learned during this period served him well during his later merger and acquisition activities.
When d'Estaing was elected president of France, Pébereau held various positions in the treasury department, including directing the service of monetary and financial affairs. From 1978 to 1981 he was the principal private secretary of the cabinet member and economic minister René Monory. Pébereau was set to become a treasury minister, but the 1981 election of a socialist government thwarted those plans. "I was 40 and I knew that I had to make a choice—either stay in the civil service and wait for one of the top jobs, or move into the private sector," Pébereau told the Financial News (June 18, 2001).
In 1982 the president of the Crédit commercial de France (CCF) appointed Pébereau a general director. The CCF was privatized in 1987, and Pébereau was promoted to president. At CCF Pébereau learned about the efficiencies of technology. In collaboration with the French technology specialist Minitel and France Telecom, he started the first home banking program in the world.
FROM GOVERNMENT TO PRIVATE SECTOR
In 1993 Pébereau's cost-cutting initiatives at CCF earned him the post of president of the Banque nationale de Paris (BNP). Here Pébereau spearheaded privatization by streamlining operations, creating what the Financial News called the "most efficient retail network in Europe" (June 18, 2001). He was credited with revolutionizing back-office technology. In 1997 BNP won the right to operate in New Zealand, bought Laurentian Bank and Trust of the Bahamas, enhanced its joint venture with Egypt's Banque du Caire, and opened a subsidiary in Brazil. BNP expanded to China in 1998 with the purchase of Peregrine Investment's Chinese operations. Further expansion included new offices in Peru, Algeria, Uzbekistan, and India. BNP also bought Prudential's Australian stock-brokerage operations. Pébereau avoided scandals during the real estate crisis in the early 1990s, and he also emerged unscathed from the 1998 emerging-markets setbacks in France. In addition to his leadership at BNP Paribas, Pébereau served as a director of Lafarge and Saint Gobain, a member of the supervisory boards of AXA and Dresdner Bank AG, and president of the French Banking Federation.
CHANGING THE FACE OF FRENCH BANKING
In 1999 France's two other large banks, Société Générale and Paribas, announced plans to merge. Pébereau, seeing that BNP's position would be weakened by this potential merger, made an unprecedented double counteroffer to merge Société Générale, Paribas, and BNP into a "tres grande banque" or superbank. The bank was to be dubbed BSP for each company's initials. Pébereau urged the formation of a French bank strong enough to compete with firms from Switzerland, Germany, Great Britain, and the United States, especially in terms of market capitalization. Pébereau's initiative was met with criticism and skepticism, reminding some analysts of other grand schemes in France that had not fared well.
Pébereau's move ruffled many feathers, especially since he did not consult with regulators or the leaders of Paribas and Société Générale, as was customary in French banking. Soon he was being compared to a cowboy and frowned upon by the old guard; however, the hostile counteroffer marked a new era in the French banking world. "France has been lagging behind other countries," Laurent Treca, BNP's director of strategy and development, said in Newsweek International. "For years French banks weren't governed by the market, but by the state…. So this is a big, big change" (March 22, 1999).
To the younger banking generation, Pébereau became a hero for braving the French authorities and marking "the end of 'Papa's capitalism'" (March 22, 1999). The Financial News reported, "His plans to create France's biggest bank so upset the status quo that the governor of the Bank of France, Jean-Claude Trichet, finally blocked the deal even though 43 percent of SocGen's shareholders had agreed to the takeover" (June 18, 2001).
Société Générale had proven elusive for Pébereau's brother a decade earlier. While Pébereau designed avenues leading toward privatization, Georges made headlines for his involvement in a 1988 takeover bid of Société Générale. The financier received amnesty during a lawsuit accusing George Soros and others of insider training, a charge for which Soros was convicted in 2002.
BNP finalized its merger with Paribas in 2000. When the merger was announced, 900 Paribas staff members quit, and senior Paribas managers were openly opposed to the bid. However, Pébereau's firm yet loyal management style won over the Paribas camp, and peace was restored. In Pébereau's view the merger between BNP and Paribas was very successful. He believed that despite the different cultures of the two organizations, the merger was truly one of equals. Moreover, services for both the domestic and international customers were greatly expanded.
The combination of the two companies gave BNP Paribas more than 2,200 retail branches in France and combined operations in more than 85 other countries. The company focused on three business units: corporate and investment banking; private banking, asset management, and insurance; and retail banking. The successful integration won critics over and made BNP Paribas Europe's second most profitable bank by return on equity. Its cost-to-income ratio ranked it as one of the most efficient banks in Europe.
TOWARD A GLOBAL SUPERBANK
Globally, rankings were not as high, but Pébereau said he would expand on his business units by acquiring specific niche businesses and hiring top talent. BNP Paribas controlled the consumer lender Cetelem and purchased the U.S.-based Banc-West in 2002. During this time CFO Magazine described Pébereau as "ambitious and micromanaging. Pébereau may describe himself as risk averse, but he's not afraid to put his money down on a deal" (June 11, 2002).
In January 2002 La tribune, a daily business paper, named Pébereau the Strategist of the Year for 2001. The award, voted on by La tribune readers, honored the head of the French company whose strategy produced the best performance during the year. ANDESE, the national association of doctors of economics, named Pébereau Financier of the Year of 2001, honoring him as the person who had done the most to contribute to the growth of financial activity in France during the year.
Shunning French players altogether after losing Société Générale, Pébereau focused on cross-border mergers. "We are advancing rapidly towards the euro and it is a very exciting time," he told the Financial News. "But who will take the lead and what shape that will take, I don't know. I think there will be about 12 big global players of which six to eight banks will be European. And, yes, I think we will see this before I retire" (June 18, 2001).
Pébereau stepped down from the position of CEO in 2003 and handed leadership over to Baudoin Prot. Although speculation arose over whether Pébereau might be appointed president of the European Central Bank, he insisted that his only ambition was to remain chairman of BNP Paribas. In 2004 Pébereau was made a commander of la Légion d'honneur, France's highest civilian award. Prot continued Pébereau's legacy by strengthening BNP Paribas's coverage in Germany, Italy, and the United Kingdom. In October 2003 BNP Paribas was ranked eighth in equity capital in Europe, the Middle East, and Africa, and ninth in market share. Globally BNP Paribas ranked third in mergers and acquisitions in the media sector in 2003.
See also entry on BNP Paribas Group in International Directory of Company Histories.
sources for further information
"Alumni Interview: Michel Pébereau, X1961: BNP Paribas President," École polytechnique, http://www.polytechnique.edu/interview.php?id=21.
Calabro, Lori, and Alix Nyberg, "The Global 100: Bankers," CFO Magazine, June 11, 2002, http://www.cfo.com/Article?article=7292.
"Hard Study and Little Sleep Give Big Advantage to France's Top Banker," Financial News, June 18, 2001.
Leroy, Pierre-Henri. "A Freely Changing Opinion on the BNP—Société Générale-Paribas," Proxinvest, July 1, 1999, http://www.proxinvest.com/actualites/bnpsocpar.htm.
Manière, Philippe, "Michel Pébereau, le grand calculateur," LExpansion, December 18, 2002, http://www.lexpansion.com/art/91.0.64467.0.html.
Nadeau, Barbie, "Commence Firing! (European Takeover Bids)," Newsweek International, March 22, 1999.
—Maike van Wijk