After making three acquisitions in the last two years, BancWest Corp. said it has started trying to offer a wider range of products and services through an expanded branch network, rather than seeking out more deals.
In a program that started last spring, the San Francisco unit of BNP Paribas SA is focusing on expanding private banking, insurance, commercial lending, agricultural lending, and credit cards throughout its area of operation, which now includes 20 states, versus just seven at the end of 2003.
It is striving for organic loan and deposit growth, while training employees about new products gained from various transactions. It also is opening offices at a time when a tougher U.S. banking environment has persuaded its French parent to hold off on further acquisitions in the United States.
Don J. McGrath, the chairman and chief executive of BancWest, said in an interview Thursday that its goal now is to "make sure you've created the right kind of platform, training, the whole infrastructure necessary to deliver all your products through all your network."
The $68 billion-asset company opened agricultural lending offices in Minneapolis and Wichita this year, "and we have more offices planned," he said.
The real estate industries division, which handles large real estate loans, is also opening offices, "but it's not so much about opening new locations, although there is some of that," Mr. McGrath said. "It's really making sure we have this broad-based product set."
For example, an insurance business gained through the acquisition of Community First Bankshares Inc. of Fargo, N.D., in December 2004 is being expanded across the company's area and is now in nine of the 19 states in which Bank of the West operates, he said.
In 2004, BancWest also acquired the $1.2 billion-asset USDB Bancorp of Stockton, Calif., and a year later it bought Commercial Federal Corp. of Omaha.
"Through the rest of this year, I think we have a lot to do to make sure we have this network absolutely right," Mr. McGrath said.
J. Michael Shepherd, who was promoted from general counsel to chief operating officer in July, is in charge of implementing the unit's program, which is known internally as the Bear Plan, playing off the grizzly bear depicted in Bank of the West's logo. (Bear stands for "business expansion to achieve results.")
Mr. McGrath said evidence of the plan was clear in BNP Paribas' third-quarter numbers, which it reported Thursday. It said that, excluding acquisitions, total loans increased 5.5% from a year earlier, though it did not provide the dollar amount. Including the Commercial Federal acquisition, the company reported that total loans rose 28%, to $45.1 billion.
BancWest cited organic loan and deposit growth of 4.5% from a year earlier. However, that growth was offset by a 45-basis-point decline in the net interest margin, to 3.16%, BNP Paribas said in its earnings report.
Third-quarter revenue at BancWest rose 10.6% from a year earlier, to $674 million, or 7.8% of BNP Paribas' $8.66 billion total, versus a 8.8% contribution to the parent's total a year earlier. Excluding the Commercial Federal acquisition, BancWest's revenue fell 2.5%.
BancWest's net income increased 1%, to $310 million.
In a pre-recorded webcast, BNP's chief executive officer, Baudouin Prot, reiterated his intention to stay away from U.S. banking mergers and acquisitions for now.
The U.S. market is "challenging" for all regional banking companies, he said. "We're going to concentrate in the next few quarters on improving and deploying this plan to make sure that, in terms of revenue growth, we get to the best level before we think about moving again on acquisitions."
However, Mr. Prot said that he still thinks that in the long term the United States, "especially the western part of United States, where we are, has one of the best demographics in the entire world and remains a very, very good place for retail banking."
BNP, which has roughly $1.8 trillion in assets, reported that third-quarter net income increased 24.9% from a year earlier, to $2.13 billion. The increase was fueled by the acquisition of the Italian banking group Banca Nazionale del Lavoro and organic growth in the asset management business.
Revenue from asset management rose 22.3%, to $1.35 billion. Revenue from corporate and investment banking grew 4.3%, to $2.23 billion. French retail banking revenue grew 5.3%, to $1.83 billion, and international retail financial services, which includes BancWest, rose 24.9%, to $2.35 billion.
