Banque Nationale de Crédit
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The Banque Nationale de Crédit (BNC, lit. 'National Credit Bank') was a bank founded in 1913 by spin-off of the French operations of the Comptoir d'Escompte de Mulhouse, which at that time was under the jurisdiction of the German Empire. The BNC grew dynamically in the 1920s, acquired its former parent in 1930, but soon came under financial distress during the European banking crisis of 1931.
It was restructured with financial support from the French government, and in 1932 became the Banque Nationale pour le Commerce et l'Industrie (BNCI), a significant predecessor entity of BNP Paribas.
On 25 June 1913, in a context of rising tensions between France and Germany, the Comptoir d'Escompte de Mulhouse, by then known under its German name Mülhauser Diskonto-Bank, decided to group its French activities into a separate subsidiary, which was named the Banque Nationale de Crédit and in which it retained 46 percent of equity capital.[1] Eugène Raval was its first managing director, then in 1914 became its chairman, taking over from Georges Cochery, and kept that position until 1923.[2] The BNC soon undertook a series of acquisitions of its own including those of the Banque du Midi, Crédit du Centre, Crédit du Sud-Ouest, Banque de Nancy, and Banque de Metz. By 1922, it had expanded to 442 agencies. That same year, it acquired the Paris-based Banque Française pour le Commerce et l'Industrie (BFCI).[3] In 1924, it became France's most profitable bank, with profits exceeding 30 million francs.[4] It also opened a branch in London in 1928, and ranked fourth among French banks by total deposits, behind the long-established leaders Comptoir National d'Escompte de Paris, Crédit Lyonnais, and Société Générale.[3]
Meanwhile, the CEM engaged in dynamic expansion of its own, growing from 4 locations in 1913 to 57 in 1930. In 1921, CEM and its part-owned subsidiary the BNC reached an agreement not to compete on their respective turfs, respectively Alsace-Lorraine and the rest of France. CEM gradually sold its BNC shares, partly to the Comptoir Lyon-Alemand) and to the BFCI before its merger with the BNC. Eventually, in May 1930, the BNC acquired its former parent the CEM.[1]
Partly as a result of its rapid growth, the BNC ran into financial difficulties in the challenging environment of the early 1930s. Confidence in its soundness evaporated in the course of 1931. To avoid a disorderly crash, the French government and a consortium of banks and other companies attempted a rescue intervention. They forced the director (André Vincent, also director of the Comptoir Lyon-Alemand) to resign, and the Bank of France took over BNC debts in September 1931.[4] This, however, was not enough to put an end to the ongoing bank run, and the Minister of Finance, assisted by a group of French banks, went on to provide an additional guarantee for depositors. Even so, the worldwide crisis kept spreading and investors continued to withdraw their money. By late 1931, over 75% of BNC deposits had been withdrawn, causing the bank's share price to slump. In January 1932 the French authorities eventually decided to liquidate it.
The BNCI was created on the 18 April 1932 to take over the viable business activities of the defunct BNC, while the latter's remaining assets were being liquidated in a process that enabled the reimbursement of the French public assistance by 1950 and of other creditors in 1962;[3] even former shareholders were eventually able to recover positive value.[4] The former bank's headquarters and staff were used to create BNCI with fresh capital of 100 million French francs.[5]
