BNP Paribas seeks to become market maker for local government bonds by 2013

Thursday, April 7, 2011

France's BNP Paribas will launch operations as an investment bank in Colombia in May with the expectation of becoming a market maker for local government bonds within the next two years, Corporación Financiera BNP Paribas' fixed income head Omar Duque told BNamericas.

The unit will begin operating with the minimum required capital of some US$15mn, which will be boosted to 40mn euros (US$57mn) over the next few months, he said.

"We have had a positive view on Colombia and its financial markets before it received its investment grade status, and we see a lot of opportunities within this growing market," country head Gregorio Toulemonde said.

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Corporación Financiera BNP Paribas will basically provide financing in pesos to local financial institutions, Colombian and foreign companies, public sector agencies and regional governments.

The bank will take part in the country's capital markets through bonds, commodities and derivatives trading, operate in the FX market and provide hedging, financing and investment alternatives for its customers, Duque said.

BNP Paribas has operated in Colombia through a representative office for more than 40 years, through which it has financed infrastructure projects, advised local companies in M&A deals and provided trade financing.

The French bank uses its Colombian representative office as a financial hub to serve Central America, the Caribbean and Venezuela.


The launch of this new unit in Colombia is part of BNP Paribas' expansion plan in Latin America, where the bank will keep increasing its product offer and continue to grow in selected markets, Toulemonde said.

"We're considering all possible growth opportunities in the region," he added.

In Latin America, BNP Paribas also operates in Brazil, Argentina Chile, Mexico and Peru.

Over the last few years, BNP Paribas has closed its subsidiaries located in countries on the Organization for Economic Cooperation and Development's (OECD) "grey list" of nations, which included Panama, the Bahamas, Costa Rica and Uruguay.