The British & French Bank (1947-1967) : a bridge between two nations

On March 11, 1947, the London branch of the Banque nationale de commerce et de l’industrie (BNCI), which had been operating in that city since 1938, became a subsidiary under British law, taking the name of the “British & French Bank (for Commerce and Industry) Limited”. In 1956, a special resolution was taken to rename it the “British & French Bank Ltd” (B&FB).

As early as February 1941, at a time when all French assets were “frozen” and placed under the control of the Bank of England , the London branch of the BNCI proposed the creation of a bank “under English law” which would operate in parallel with its London-based branch. The idea was supported by the BNCI’s headquarters in Paris, which was prepared to finance the British Bank for Foreign Trade’s acquisition proposal. The idea was that a “British bank” would manage all “purely British” business and much more actively promote the “British character” of the BNCI – something the French branch in London was unable to do, given that it was under the control of the British authorities.

The new entity, operating entirely under British law, was 60% owned by the BNCI and 40% by S. G. Warburg & Company Ltd – an associated English bank specialising in investment, with considerable credit resources in London . All of its ordinary share capital was owned by the BNCI, which thus held majority voting rights. The preferred shares, however, were divided among the British financial institutions. The Board of Directors was chaired by a British chairman, Sir S. Findlater Stewart (who would continue to hold this position until 1959), with equal numbers of British and French directors.

The institution was able to draw upon credit from its mother company, the BNCI, which provided it with direct, rapid banking relationships with mainland France – a considerable advantage for a company of French origin operating from Britain. In this way, for example, an English company buying or selling in France, or another country in which the bank operated, was able to obtain the commercial information or financial assistance it required. It could also rely on faster completion of its transactions when conducted within a single banking network. The B&FB’s customers included French companies from the following sectors: automotive (Renault, Dunlop), textiles (the Groupement d’importation et de répartition de laine, la Compagnie lainière) and British import/export companies.

The BNCI had grown internationally by expanding overseas during the German occupation of France. The bank comprised a network of branches which, over ten years, expanded to cover all of the major countries of Africa, in which it developed a wide range of business interests. And it was mainly through Nigeria that trade with a number of adjoining French territories flowed. The BNCI owned head offices which served as start or end points for a very large proportion of the banking transactions associated with these flows. A Nigeria-based bank would evidently facilitate this work, and serve the business interests of the French territories.

In the years from 1958-1960, the BNCI and the B&FB conducted exploratory work in the country and, on the basis of several travel reports, had high hopes for development opportunities in the country. The establishment of a bank operating under Nigerian law was agreed upon,using the B&FB’s existing network in the country. This initiative offered an undeniable political advantage , enabling the bank to participate in the financing of a number of major projects, such as the expansion of the ports of Port-Harcourt and Lagos, and the extension of the railway network in the north-east of the country. There was also a proposal to include two Nigerians on the new bank’s Advisory Board, one of whom was the wife of the Nigerian Minister of Justice. The networks provided by these two individuals played a key role in stimulating the bank’s growth and plans in the country.

With few savers and depositors in Nigeria at that time, current operations in that country needed to be financed by advances from London. Meanwhile, the London division depended as much on the funds held by its customers – attracted by the bank’s membership of the BNCI group – as on the substantial deposits of the BNCI itself, which also owned all the shares in that banking institution: “Thanks to the large permanent deposits maintained in London by the BNCI, we have been able to finance our activities in Nigeria by making some £3 million sterling available to our branches in that country.

In order to acclimatise its British staff to BNCI philosophy and methods, short courses in Paris were set up for a number of B&FB employees. Similarly, the bank established a promotion ladder for Nigerian employees who were to assume positions of responsibility, initiating a training programme in London for the most “promising” among them, for periods limited to 3 months.

Following the May 1966 merger of the BNCI and the CNEP in France, creating the BNP, the new bank sought to consolidate its business in the United Kingdom. To do this, the CNEP subsidiary in London merged with the British & French Bank Limited in 1967, which was at that time under the direction of Sir John Balfour (who had been managing B&FB since 1959). The new entity moved into the buildings occupied by the CNEP at 8-13 King William Street, and its staff formally became employees of the new bank. Its capital increased from £2,000,000 to £3,000,000.

It was not until March 29, 1974, under the leadership of Sir Patrick Reilly, that Banque Nationale de Paris Limited (BNP Ltd) assumed the mantle of the British & French Bank Ltd, becoming the Banque Nationale de Paris plc (BNP plc) in 1981. This eight-year wait can be explained by development strategy imperatives: the management team at that time, referring to the “Etude d’implantation de la Banque nationale de Paris à Londres” survey, concluded that by retaining the name of the subsidiary incorporated on the B&FB network, it would be better equipped for more aggressive commercial operations in an already highly competitive environment. The main argument was based on the excellent growth results achieved by the B&FB in comparison to other branches of French banks in London. Amid an environment of Europeanisation and the opening up of its financial centres, an “English” bank would be more able to consolidate the positions it had already acquired, and to develop further.