Succeeding in the financial markets is testing enough in the current environment, but with the added pressures of a bank merger, the launch of the euro and the impact of online trading, the task becomes a real challenge even for the most experienced of bankers. Loic Meinnel, global head of FX trading and sales at BNP Paribas, has undergone such pressures over the past few years, and has relished every minute of it.
Indeed, rather than overwhelm him, Meinnel says the constant challenges are “one of the things that has always fascinated me about the market – there is a constantly evolving landscape”. Many of these changes have had an enormous impact on BNP Paribas which, as a major European bank, has been particularly affected by the launch of the euro. Meinnel thinks the combined events have made this “probably the most interesting period I could ever have in my current role – we have essentially been sailing in uncharted waters”.
Meinnel, who predominantly splits his time between the bank’s Paris and London offices, puts his success at coping with these challenges down to the knowledge and lessons in teamwork gained from his career path. Starting as a junior trader at BFCE in late 1986, he progressed through positions at Merrill Lynch in London and UBS Zurich, before finally moving to Paribas in October 1995 as global head of FX options trading. He became global head of FX trading and sales in June 2000.
“Currency options is a great school for building belief in teamwork, which is one of the keys to success. We ran a global book and therefore shared responsibilities by making decisions for the whole team. This is one of the essential disciplines of a global business head – you have to rely upon your team and learn how to trust and control your operations of responsibility,” Meinnel explains.
One of these responsibilities was to take a close look at the FX business, as BNP Paribas was losing a significant amount of its core activities with the launch of the euro. “We lost a market where we were a top provider; however, our global strength helped mitigate the loss of what was a good revenue source for us. This involved trying to think up ways to leverage BNP Paribas’ relationships, capital, infrastructure and staff,” he says.
Keys to Success
Meinnel notes that three major factors have contributed to BNP Paribas’ success in these hard times: the merger, which forced the new company to reassess its activities; the human skills within the global team; and the company’s long term vision.
“We reinvented the business, looked at how we conducted operations, managed relationships and promoted products. The impact of the merger was extremely positive – more so than we initially imagined. Indeed it took some time before we realised the full potential of the new organisation, which is immense,” he says.
A further key element of the bank’s potential – human skills – is an area that Meinnel has a strong belief in. “Our staff has been loyal and committed to the project and it has been an immense privilege to work with them. They have ensured that we have been able to deliver the level of service that both we and our clients expect through their ability and willingness to meet the changing conditions of the market.”
Meinnel believes that the bank’s long term strategy and consistent approach has also contributed to its success. “We think and plan long term. For example, we have a client base that was developed before, during and after the Asian crisis. This is something that marks our institution – we demonstrate our commitment to clients through all cycles.”
This long term thinking also applies to operations in other emerging markets. “It is about knowing your environment and adhering to your long term vision. No institution serious about investment banking in general – not just the FX markets – can afford to ignore what is happening in emerging markets,” he says.
As well as its Asian interests, Meinnel says the bank is a leading liquidity provider in both Middle East and African currencies, and has an operation in Sao Paulo, Brazil. “Irrespective of recent events in Brazil and Latin America generally, we have been very pleased with developments in this office,” he adds.
“We have learned a lot about the resilience of both our clients and ourselves. We are comfortable with our abilities and presence in the markets, and have shown the capacity to effectively manage risk and derivative products in the long term,” says Meinnel.
Among emerging markets, Meinnel says Eastern Europe is on “a different level” to the other regions. “We have expanded there aggressively over the past 18 months,” he explains. “We view much of Eastern Europe as part of our pan-European franchise; as a whole, the region is a very attractive environment for us.”
New challenges in a new era
Meinnel’s position as chairman of the board of the multibank portal FXall since June 2002 demonstrates the bank’s commitment to online trading. “Developing our e-commerce capabilities was a challenge because we had to integrate two solutions at an early stage. We had to be pragmatic, disciplined and avoid unnecessary spending on cosmetic developments to ensure that our platform was robust, constantly available and that it delivered what the clients wanted,” he says.
However, Meinnel stresses that e-commerce is not a ‘one-way street to success’, and that the winners will be those with the right alignment to respond to their clients’ needs. “Our strategy is to position ourselves closer to our clients and leverage the rest of our institution,” he says. “This means we focus more on advisory and providing solutions for our clients than just providing liquidity. We are much stronger in having done this. We are in an advantageous position being one of the leading European banks, and by demonstrating that we are able to provide a quality service in all markets – not just Europe – we earned the trust of our clients.”
As mentioned previously, Meinnel is strongly of the view that the best service to clients is a combination of human skills and the efficiencies brought about by e-trading. Again, the human factor ensures that pricing and the level of service remain consistent. “Our FX specialists need to constantly ask themselves: Why are my clients dealing in certain maturities and products? What is motivating my clients and what are their objectives? How can I help them achieve their objectives? By thinking in these terms, we have become less product-driven and more a solution provider,” he says.
The key for success in servicing clients comes down to one thing: provide clients with services and advice that work effectively for them. “This does not necessarily mean the most complex services – although they can of course be provided – it is about delivering effective solutions. We want to be innovative to meet specific requirements, but our policy is not necessarily to grow the distribution of complex services at all costs. I do not believe that clients will deal with us in FX alone; they look at our spectrum of services and our ability to use them. What defines success for our bank is a long term relationship that enables a client to meet its objectives in the most efficient manner.”
Meinnel continues to work towards the goal of creating a truly global, client-driven business, as well as to enjoy the challenges that the market brings