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BancWest<br />
In the United States, the Retail Banking business is conducted through BancWest Corporation, a company<br />
formed out of the 1998 merger between Bank of the West and First Hawaiian Bank, wholly-owned by<br />
<strong>BNP</strong> <strong>Paribas</strong> since the end of 2001. BancWest has completed a number of acquisitions since that date, the<br />
latest being Commercial Federal Corporation in December 2005.<br />
Bank of the West offers a very large range of retail banking products and services to individuals, small<br />
businesses and corporate clients in 19 states in western and mid-western America. It also has strong national<br />
positions in certain niche lending markets, such as marine, recreational vehicles, church lending, and small<br />
business administration.<br />
With a market share of close to 40% based on deposits (source : SNL Financial, 30 June 2007) First Hawaiian<br />
Bank is Hawaii’s leading bank, offering banking services to a local clientele of private individuals and<br />
companies.<br />
In total, with close to 12,000 employees, 742 branches and total assets of USD 74 billion at 31 December 2007,<br />
BancWest currently serves some 4 million client accounts. It is now the 6th-largest bank in the western United<br />
States by deposits.<br />
Bank of the West, Los Angeles<br />
<strong>BNP</strong> <strong>Paribas</strong> <strong>Annual</strong> <strong>Report</strong> 2007 /////// International Retail Services<br />
After nine months of sustained growth, the American economy slowed signifi<br />
cantly in the fi nal quarter, with GDP dipping to 0.6%. For the year as a whole<br />
the economy grew 2.2%, the lowest rate since 2002 and 1% below the average<br />
for the 2004-2006 period.<br />
The major downturn in the real estate market fi rst made itself felt in the subprime<br />
segment before touching off a fi nancial crisis and fi nally spilling over<br />
into the real economy. At the end of 2007, all economic indicators pointed to<br />
a slowdown extending far beyond the real estate sector alone.<br />
In spite of the infl ationary tensions generated by the weak dollar and rising<br />
prices for oil and other commodities, in September 2007 the US Federal<br />
Reserve embarked on a fast-paced, far-reaching programme aimed at loosening<br />
monetary conditions through successive cuts in key rates – bringing<br />
them from 5.25% down to 4.25% – and massive injections of liquidity.<br />
After several years of strong growth and high profi tability, operating conditions<br />
for American banks took a turn for the worse while competition for both loans<br />
and deposits increased. This unfavourable situation for banks was exacerbated<br />
by the ongoing inversion of the yield curve (short-term rates higher than<br />
long-term rates) leading to a general erosion in intermediation margins. Lastly,<br />
credit risks, which had been at historically low levels, deteriorated signifi cantly,<br />
particularly during the second half of the year.<br />
Despite this diffi cult business environment, BancWest kept to the organic<br />
growth plan initiated the previous year. Bank of the West’s new sales organisation<br />
was systematically rolled out and the product and service range was<br />
uniformly offered throughout the network, to corporate and individual clients<br />
alike. The infrastructure and systems needed to develop cross-selling were<br />
put into place. Major investments were made with a view to strengthening the<br />
Bank’s presence on the corporate market and ten specialised branches were<br />
opened during the year. Private banking services were extended to cover the<br />
entire network through the organisation of dedicated regional teams.<br />
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