BNP Paribas SA, France's largest bank by market capitalization, Wednesday announced senior management changes that will see current Chief Executive Baudouin Prot replace Michel Pebereau as chairman, while chief operating officer Jean-Laurent Bonnafe will become CEO.
The succession plan, which had been widely expected since Pebereau will reach the retirement age of 70 next year, highlights how the bank opted for an internal transition as it prepares to face more challenging markets than in the past and more demanding regulation.
The reshuffle, which was announced at BNP Paribas's shareholders meeting, is due to take effect Dec. 1, 2011.
"I have always focused on paving the way for the next generations," Pebereau said in a statement. "I am convinced that with Baudouin Prot and Jean-Laurent Bonnafe, two highly qualified and capable men at its helm, BNP Paribas has a very bright future indeed."
Bonnafe, 49, has played a key role in developing BNP Paribas into a global player. An engineer by training, he joined BNP Paribas in 1993 after a stint as a civil servant, taking on key tasks such as the integration of BNP with Paribas after their merger in 1999, and heading BNP Paribas's French retail banking unit.
He rose to prominence within the bank after helping to pull off two acquisitions that turned BNP Paribas into a major European player: the takeover of Italy's Banca Nazionale del Lavoro in 2006 and the acquisition of stricken Belgian bank Fortis in 2008, which helped the French lender boost its retail foothold in Belgium and propelled it into the top ranks of the world's wealth management firms.
Speculation about his possible promotion to CEO emerged early this year when he returned to Paris from Brussels, where he was based for two years during the integration of Fortis.
Prot, 59, is stepping up to the chairmanship of the bank having served as CEO since 2003, when Pebereau decided to split the role of CEO from that of chairman.
Often portrayed as Pebereau's trusted lieutenant, he steered BNP Paribas through the financial crisis and helped it emerge as one of the more robust lenders in Europe.
Last week, BNP Paribas Wednesday reported a better-than-expected 15% hike in first-quarter net profit, aided by a sharp decline in provisions for bad loans in an improved economic environment.
The bank, which last year passed EU-wide stress tests with a wide margin, has repeatedly said that it will be able to comply with more stringent international banking rules without raising new capital.
BNP Paribas was privatized in October 1993, and was valued at the time the equivalent of $6.5 billion euros. It is now capitalized at $65 billion euros, around 10 times its value when it was privatized and has become one of Europe's largest lenders, with sizable operations in Italy, Belgium, Luxembourg, U.S. and Turkey.
Elena Berton is a reporter for Dow Jones Newswires, where this story originally appeared. Write to her here.