BNP Paribas at the heart of the Second World War

1938-1939: Preparations and the start of the war

In 1938, Germany annexed Austria and threatened Czechoslovakia, a country that France promised to defend in the event of aggression. But France did not want to act alone and the British refused to fight for Prague. By signing the Munich agreements, Neville Chamberlain, British Prime Minister, and Edouard Daladier, Chairman of the Council of Ministers, gave in to Hitler’s claims for the Sudetenland, abandoning the Czechoslovak ally, believing that they had “saved the peace”.

In this tense international context, the Supreme Council of National Defence ordered banks to transfer their securities custody services from cities close to the German and Belgian borders to regions less exposed to war.

BNCI set about consolidating all its securities custody activities in Brittany, where in December 1938 it acquired the Château de La Conninais estate, two kilometres from the town of Dinan. Securities from eastern and northern France were stored there.

In 1939, and in defiance of the Munich agreements, German troops invaded Czechoslovakia. France, itself now threatened, and the UK promised to defend Poland. But to widespread astonishment, the German-Soviet Pact was signed in Moscow. Hitler was thus free to attack Poland, whose territory would have to be shared with the USSR. The UK and France declared war on Germany on 3 September, and general mobilisation was decreed.

1940-1943: Trying to save what can be saved

In 1940, BNCI evacuated and refocused its activities

After the armistice was signed at Rethondes on 22 June 1940, France’s territory was divided up and partially occupied by the German and Italian armies in a small area to the south-east, before being entirely occupied from 8 November 1942.

In 1940, with the invasion of France and then the Occupation, BNCI had to move the securities held in Dinan to the free zone in Pau. It was done on 20 June, after a nerve-wracking evacuation that took five days. 

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As regards its operations, BNCI would “relocate” outside France and prepare for the post-war period. It set up a subsidiary in 1938 in the British capital. In 1947, it became the British & French Bank, a subsidiary of the English bank with French capital, so that it would be able to expand its business in London after World War II.

While France was occupied, divided into two zones and saddled with a sluggish economy, BNCI grew overseas, as it could no longer conduct business on French soil, or support clients who had invested in international trade. The war imposed constraints encouraged the bank to go global.

Algiers was the starting point. In July, BNCI took control of the Banque de l’Union Nord-Africaine, which became BNCI Africa (BNCIA). The goal was to add a new dimension to this small establishment in Algiers, before creating other headquarters in the country. At the same time, a branch was founded in Casablanca, Morocco, and another in Saint-Louis, Senegal. BNCI built a growing position in Africa with offices opened in Tunisia and Guinea in 1941. That same year, BNCI acquired Crédit Foncier de Madagascar. The development of BNCIA continued with the opening of around 30 branches in Syria and Lebanon, which were under French rule at the time.

BNCI brochure with foreign subsidiaries – French West and Equatorial Africa, Morocco, Algriers and Tunisia, 1953, BNP Paribas Historical Archives, 1Fi262-2-5

1940: Paribas’ international relations assist the war effort

At the height of the conflict, when Germany and its allies had an undeniable upper hand, the French government and its allies were able to rely on certain Paribas figures.

Jacques Allier was one of the most notable. He was an essential link in what has been referred to as the battle for heavy water, which was critical to the research carried out by Frédéric Joliot-Curie on the atom and uranium fission.

Heavy water was a vital national and international issue. The Norwegian Nitrogen and Hydroelectric Forces Company or Norsk Hydro, based in Norway, was the only European producer and it had enough heavy water to carry on with the research. Jacques Allier, Deputy Director at Paribas and reservist in the Gunpowder Department, was summoned in 1939 to the Technical Office of Raoul Dautry, then Minister of Armaments. In 1940, he was tasked with getting the Norwegian plant to sell its heavy water stocks to France. Allier, who was in charge of international relations at Paribas, was well acquainted with Norway and the head of Norsk Hydro, Axel Aubert. Dautry relied on those historic business and personal ties to facilitate the transaction.

The mission entrusted to Allier was indeed successful, and the heavy water stayed out of German hands and was shipped to France in March 1940 before being moved to England in June 1940.

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The bank also played a role in the German blockade that sought to prevent Germany from procuring oil. The Romanian oil company, Steaue Romana, a subsidiary of the bank, saved all its output for the Allies. It was thanks to Charles Rist, a bank director since 1933, who chaired the advisory committee established with the Minister of the Blockade, that Germany could be deprived of products essential to its war effort.

In the spring of 1940, through its Brussels branch, Paribas also helped set up a Belgian retail company that would enable the Ministry of Armaments to place orders with suppliers from neutral countries, particularly in Spain and Portugal.

But in 1940, Hitler launched a massive offensive in Western Europe. Surprised by the “Lightning War”, the Allied forces were overwhelmed. The British left the continent and France – soon to be partly occupied – signed the armistice with Nazi Germany in June.

The events of May 1940 interrupted all activity. Paribas securities had already been transferred to Geneva and when fighting began in Belgium, the Brussels branch evacuated its securities and those of its clients to Paris. By the end of May, all the bank’s staff had scattered. Emile Moreau

With the balance of power unfavourable to France and its Allies in those early years of the war, banks tried to preserve their business and positions, while putting their assets at the service of a wartime government, at least until the armistice was signed in June 1940.

In 1941, Greece and Yugoslavia were invaded by Nazi Germany and its allies. Vichy France descended into collaboration, leading to the first roundups of Jews and the confiscation of their property. At Pearl Harbor, Japan attacked the Americans by surprise and without a declaration of war, sending the United States into what was now truly a world war. At the very beginning of 1942, the Nazis crafted the “Final Solution”, the objective of which was to exterminate all the Jews in Europe. In 1943, the Germans capitulated in Stalingrad after a Soviet counter-offensive. In Tunis, the last Axis forces in North Africa also lay down their weapons, before the Allies landed for the first time in Europe, in Sicily. In France, the Resistance was gaining momentum.

1944-1949: Rebuilding a country and a world

1944: The turning point

A decisive year, 1944 saw the Axis powers retreat on all fronts. In France, the military liberation of the country coincided with the first signs of a renaissance in political and social life.

Of particular note is the role played by Jacques de Fouchier, then a young finance inspector, who was for a time chief of staff to the Minister of Finance under Laval in April 1942. He resigned after Laval’s speech on Germany’s victory and the occupation of the free zone, and he too joined the French army in Algeria and then Italy.

He would play a major role in the bank’s destiny after the war and in the country’s reconstruction, creating what would become Compagnie Bancaire.

1944-1945: The role of the Resistance

At the beginning of 1944, the Resistance was much better organized and its numbers were much larger than in its early days. The networks gathered intelligence, set up escape routes and engaged in sabotage, playing a key role in the liberation of France.

There were acts of Resistance within the banking industry, with a minority joining the Free French Forces or the Allied Forces.

At Paribas, a high-ranking leader, André Debray, “put himself in the service of the Resistance, organising its funding in secret on the premises of Paribas and participating in the fighting in Paris in August 1944”. He was the bank’s top executive between 1944 and 1954.

There were also acts of bravery at Banque Belge pour l’Étranger (the forerunner of BNP Paribas Fortis), based in London. The Victoria Cross, one of the British Empire’s highest honours, is awarded for conspicuous bravery and has been granted fewer than 1,400 times in its 150-year history. Among the heroes to receive it is a bank employee – perhaps the only one: George-Albert Cairns.

Although the celebration of victory over Nazi Germany on 8 May 1945 put an end to the fighting, hundreds of thousands of French people still had no news of their loved ones, unaware of whether they were dead or alive, imprisoned or deported to Germany, or missing in action during the Liberation. By the spring of 1945, more than 1.5 million people (prisoners of war and civilians) had to return to France. Many cities had been destroyed.

1944-1946: Restoration of Republican order and reconstruction of the country

As France regained its freedom, its citizens were reinventing political institutions and seeking to reform the country’s legal and economic structures.

Under the dual impetus of the Provisional Government of the French Republic (GPRF) led by General De Gaulle, and the Liberation Committees set up locally by the Resistance, the Provisional Government, which had been set up in 1944, took over the reins of the country. The powers of the State were extended to include the economic and social realms.

Economic rebuilding

On the economic front, to speed up reconstruction and the return to normal, large national companies were established in strategic sectors such as transport and energy. The banking sector also followed suit, as part of a vast programme to reorganise all banking activities, giving the State control over credit. Thus, the French government became the main shareholder of Banque de France in January 1946.

The forerunner banks, on the other hand, had different destinies. BNCI and CNEP were nationalised, like all the major French deposit banks.

By opting for investment bank status, Paribas escaped nationalisation as provided for by the Law of 2 December 1945.

Social restoration

On the social front, the Provisional Government and the Fourth Republic, brought into existence on 27 October 1946, implemented the most important points set forth by the National Council of the Resistance, namely to provide a degree of protection and redistribute the rewards of prosperity to the entire population. It was the birth of Social Security, on 22 May 1946, creating a system of solidarity aimed at improving the health of the French population. Greater powers were also given to works councils.

Purges

To prevent the settling of scores between members of the Resistance and Nazi collaborators, the GPRF decided to carry out an administrative, economic and media purge. Wounds opened during the war were reawakened during the trials of the legal purge, which came after the extrajudicial purge of autumn 1944.

Banks were not spared. Laurent-Atthalin, Chairman of Paribas since January 1941, resigned at the request of the Provisional Government and was replaced by L. Wibratte in November 1944.

Rebuilding the country

In the aftermath of the war, France was a destroyed country in economic disarray, and French industry and real estate were devastated. The State had revive the production apparatus of a slow-moving country and rebuild many cities that had been bombed or even destroyed.

Given the scale of the needs, banks’ financial resources were mobilised to reignite the economy.

Discover how Paribas supported this movement :

The role of Paribas in post-war implementation

Paribas supporting the renaissance of cities and industry

Paribas relaunches French ports

How Paribas supported industries after 1945