Bank of Paris and the Netherlands

(Banque de Paris et des Pays-Bas), one of the largest private deposit banks in France; until 1968 the largest investment bank (banque d’affaires). The bank was established in 1872 after the merger of the Bank of Paris, founded in 1869, with the Credit and Deposit Bank of the Netherlands (1863). At first the bank’s main business was the issuing of state loans and industrial stocks. Later it also engaged in conventional commercial banking transactions, including deposit transactions, attracting the capital of the industrial enterprises whose securities it sold.

Closely allied with the banking house of Lazard Frères and with the Bank of Indochina, the Bank of Paris and the Netherlands, in collaboration with the Rothschild bank, became the nucleus of a powerful industrial and financial complex that controlled such key sectors of French industry as electrical engineering, steel production, machine building, petroleum refining, aluminum production, and sugar refining. The complex also controlled the economies of a number of African countries (especially Morocco) and Latin American countries (Argentina, Brazil, and others). By the start of World War II, the Bank of Paris and the Netherlands had branches in the Netherlands, Belgium, Switzerland, and Morocco and had acquired an interest in numerous other banks, such as the Bank of Indochina and the Ottoman Bank.

After World War II the Bank of Paris and the Netherlands helped arrange credits for French exports, including exports to the USSR and other socialist countries, and took a leading place in the issuance of bonds in the international capital market. In 1957 it absorbed the Bank of the Countries of Central Europe. In 1960 it established a subsidiary investment bank in the United States called the Paris-Bas Corporation, which in 1973 merged with the New York branch of the English Warburg bank and became a joint branch of the two institutions under the name Warburg Paribas.

In 1968 the Bank of Paris and the Netherlands was a founding partner in the Financial Company of Paris and the Netherlands (Compagnie financière de Paris et des Pays-Bas), a holding company with four member institutions. The company’s banking operations were transferred to the Bank of Paris and the Netherlands, which was converted to a deposit bank but to a large extent preserved the functions of an investment bank. The foreign divisions of the Bank of Paris and the Netherlands were reorganized into subsidiary banks. In 1972 the holding company acquired controlling interests in the Bank of the Paris Alliance, the French Credit and Banking Company, and the Crédit du Nord.

The Financial Company of Paris and the Netherlands was linked by agreement in 1972 with the West German group of banks headed by the Bayerische Vereinsbank. According to the agreement both sides perform all banking transactions for their clients in the Common Market countries. In 1973–74 the Paris-Netherlands Financial Company opened divisions in Abu Dhabi and Qatar and participated in founding the Bank of Sharjah. Acting jointly with the Bank of Tokyo, it founded a society to promote Japanese investments in Europe and Africa. Together with the Bank of America and a number of other banks, it helped found the Asian and Euro-American Merchant Bank in Singapore and similar banks in Hong Kong, Indonesia, and Malaysia, as well as the International Bank of Mexico in London.

In 1973 the Bank of Paris and the Netherlands had 32 branches and offices in France and one branch in Great Britain. As of 1974, it also had representatives in Mexico and Moscow. In 1973 the Paris-Bas group had 955 divisions. On Jan. 1, 1974, the sum of the balance of the Bank of Paris and the Netherlands was 13.6 billion francs, and its capital and reserves were 800 million francs. On Jan. 1, 1974, the sum of the balance of the Paris-Bas group was 36.9 billion francs. Current accounts and deposits (in francs) amounted to 28.4 billion; loan operations, 23.6 billion; securities, 4.6 billion; participation in the capital of other banks, 3.3 billion; and capital and reserves, 2.3 billion.