Générale de Banque reaffirms its image as Belgian European bank

Date: 28/03/1996

By David Thomas

BELGIUM'S biggest bank looks set to continue its so-called 'stand-alone' strategy despite calls from leading politicians and others for it to join forces with other major national players and form a 'mega-bank' in time to compete in the single currency market-place.

Générale de Banque/Generale Bank will persist in pursuing an acquisition-driven strategy designed to underpin the drive to reinforce it's desired reputation as a 'European bank with Belgian origins'.

Last year, this saw the purchase of Crédit Lyonnais Nederland, which has now become Generale Bank Nederland.

The strategy has included the setting up of 'European desks' in London, Paris, Lille, Rotterdam and Cologne with the aim of presenting its key customers - small and medium-sized enterprises and wealthy individuals - with access to the services of a fully-integrated European network.

The acquisition of 77&percent; of Fimagest, the French investment and asset-management firm, fulfilled two aims: improved access to the French market and a diversification away from the bank's traditional dependence on income from foreign exchange revenues.

Last year was a milestone for Générale. The bank also formed a strategic partnership with the Belgian post office, Banque de la Poste. This had the advantage of marrying two highly-complementary client bases: La Poste's rural customers with those of the more urban-oriented Générale.

So, although the stand-alone strategy is not set in stone - “we are always looking at what is going on in the banking sector” - it seems unlikely to change in the near future, despite the heavy political pressure being brought to bear on all Belgium's banks.

Générale's next big move is likely to be into Germany and, in particular, North-Rhine Westphalia, where the bank already has six branches. “We are looking there but we haven't found anything yet,” said the bank's spokesman.

If nothing turns up, Générale will be happy to concentrate on developing its retail banking operations in Belgium in the run-up to the creation of the single currency bloc, of which the country hopes to be a founding member.

The bank has not been slow in making preparations. Already, administrative and technical adaptations to prepare for the conversion are under-way at an estimated cost of around 50 million ecu.

Générale will outline its broader strategy towards EMU in one section of its annual report next month called “One Bank, A Single Currency”.

This report shows that the bank has already set up various working parties to prepare for the arrival of the Euro.

The first group of studies will focus on administrative simplifications and changes to computer systems, while the second will look into the more controversial area of the new strategy: devising new products and approaches to reduce the bank's dependence on revenues from foreign exchange business as at least six of Europe's currencies disappear from the map.