September 25, 2014 / 4:46 PM / in 3 years

U.S. repair job for BNP Paribas' new chairman

PARIS/LONDON (Reuters) - Jean Lemierre, a former head of Europe’s reconstruction bank and a veteran of international debt negotiations, will need all his diplomatic skills to repair BNP Paribas’ (BNPP.PA) relations with the United States as chairman of France’s biggest bank.

An employee walks behind the logo of BNP Paribas in a company's building in Issy-les-Moulineaux, near Paris, June 2, 2014. REUTERS/Charles Platiau

BNP’s board is expected to name him on Friday as replacement for Baudouin Prot, people familiar with the matter said.

The 64 year-old is set to take on the job at a pivotal time for the bank.

BNP emerged from the financial and eurozone crises healthier than most rivals, but was hit in July by a record $8.9 billion fine for breaking U.S. sanctions on Sudan, Libya and Cuba between 2002 and 2012.

The U.S. troubles cost several executives their job. Prot, who has been CEO or chairman at BNP for 11 years, resigned this week, satisfied the bank had stabilized after its summer of turmoil, sources said.

Lemierre fits all the criteria to chair the bank: a graduate from one of France’s elite “ecoles”, former head of its Treasury, a long spell running a multinational public body and then a smooth transition to the private sector six years ago.

He was a key negotiator during the talks with U.S. authorities, sources told Reuters.

Now as head of Europe’s fourth biggest bank he will have more work to do to repair the damage. BNP is banned from conducting some U.S. dollar transactions next year and is only six months into a new plan to kick-start earnings and improve profitability in the next three years by expanding in countries such as the United States and Poland.

The bank’s shares have underperformed its peer group this year with a 6 percent fall.

Banking industry sources expect the changes at the top and the banks recent problems to prompt more changes in its ranks.

NAPOLEON

Lemierre joined BNP Paribas in 2008 as a senior adviser to then chairman Michel Pebereau, one of the elder statesmen of French banking. He remained in the role when Prot took over from Pebereau in 2011.

Effectively vice-chairman, Lemierre’s role at BNP was higher profile than at any other bank. His office sits at the heart of its Paris headquarters in the ornate room where Napoleon Bonaparte married Josephine in 1796.

Lemierre has focused on the bank’s international activities, particularly in emerging markets. Piloted by Prot, BNP has become one of the most international banks in the world, with operations in 73 countries beyond its strongholds in France and Belgium.

Lemierre represented BNP and led all creditors in complex and drawn-out talks to restructure Greece’s debt in 2012, regarded as one of the pivotal points of the euro zone crisis.

“He has a unique blend of understanding market realities with a firm grasp of the complexities of global economic trends,” Charles Dallara, the former managing director of the Institute of International Finance, who co-chaired the Greek debt restructuring talks with Lemierre, said.

People who know Lemierre described him as hard-working, meticulous and incisive. One former colleague said he was a demanding boss, but informal and encouraging to staff.

Once tipped as a contender for the top job at the International Monetary Fund, he could have had a career at the Banque de France or at the European Central Bank, they said.

”He was a brilliant financial technician but also very good at the politics of managing the government shareholders,” an EBRD official recalled.

Lemierre is from a modest family background in Sainte-Adresse, near Le Havre in north-western France. He was a class fellow of Prot and Bank of France chairman Christian Noyer at the highly-prestigious Ecole Nationale d‘Administration civil service school.

Prot and Lemierre were among the brightest students at ENA, one of the class fellows told Reuters.

“Baudouin was rather sure about his qualities, but quite friendly and lively. Jean was serious but highly regarded by other ‘eleves’,” the person said.

With a background that includes taking the EBRD into Mongolia, leading creditors to restructure debt in Latin American and Africa, and a detailed knowledge of Middle East politics, Russia and China. His advice to bankers during the current period of political turbulence is to act carefully.

His remarks to them at a conference last month may be apt for his new role: ”My advice is to monitor carefully, not to overreact, but not to think it’s business as usual.”

Additional reporting by Paul Taylor and Matthias Blamont. Editing by Jane Merriman

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