The French investment bank told analysts in its third-quarter earnings call that it would take more than a year before Deutsche Bank`s client transition was completed, but it expects the deal, which was officially signed in September, to be completed immediately. BNP Paribas said earlier this month, in its call for quarterly profits, that it would take more than a year for Deutsche Bank`s customers to make the transition. The French investment bank also expects additional revenue of around 400 million euros at the end of the transition. The probe highlights the red flags that are raised when banks pay outsiders to open doors or cultivate counterparties. Societe Generale SA, for example, paid more than $1 billion in 2018 to resolve U.S. allegations that it paid bribes to secure business with Libya. Last year, Deutsche Bank settled a complaint — without admitting liability — from a Dutch housing company that came from payments made to an intermediary that organized its derivatives operations. The bank paid several billion pounds to former Goldman Sachs Group Inc. banker Simon Lloyd months after the deal closed in September 2019, as people familiar with the deal said.
The French anti-corruption agency (AFA) investigated the incident during a routine review and will present a report in the coming weeks. Deutsche Bank and BNP Paribas signed a Master transaction agreement in September, after agreeing in July on the principle of a deal to switch customers to premium shares of the German bank on BNP Paribas. Deutsche Bank is in the midst of restructuring to drastically reduce costs, and confirmed earlier this year its intention to withdraw from equity trading, including first-class brokerage hedge funds. BNP Paribas described the agreement as a success. The French bank says it is on track to become the leading broker in Europe and aims to eventually become one of the four largest on the planet, with client assets reaching between $250 billion and $300 billion, Bloomberg reported at the time of the deal. In a statement, the two investment banks confirmed that the agreement was now unconditional after approval. Deutsche Bank and BNP Paribas signed a Master transaction agreement in September after agreeing on the principle of a deal in July. Meanwhile, Deutsche Bank executives were surprised to receive a call from Lloyd that indicated the French bank`s interest and wondered why their BNP Paribas colleagues had not only made direct contact, another person said.
„This milestone was reached in a short period of time thanks to the close collaboration between the BNP Paribas and Deutsche Bank teams and the banks` strong commitment to ensure continuity of service to their global institutional customers,” the two institutions said in the statement.