BNP Paribas will no longer offer outsourced trading services to external clients and instead turn its attention to solely servicing its internal asset management units, The TRADE has learnt.
The story was first reported by Financial News yesterday.
The news marks the second announcement from a major bank in the outsourced trading space this year after UBS made a shock exit from the sector in March.
BNP Paribas’ unit was much smaller than UBS in comparison when measured by number of clients and breadth of services. Sources told The TRADE that UBS’ closure of its outsourced trading offering would result in very little operational impact following the decision.
A BNP Paribas spokesperson declined to comment.
BNP Paribas is set to continue to service its internal asset management units which are growing substantially through M&A.
The outsourced trading unit sits within BNP Paribas’ securities services division and had featured in The TRADE’s Outsourced Trading Survey over the past two years. Around half of the bank’s responses came from internal units of BNP Paribas in 2023, with the percentage then increasing over the next two years.
One of the unit’s largest clients was RailPen, the investment manager for the Railways Pension Scheme (RPS) in the UK, which appointed BNP Paribas in 2015 to manage its dealing activities.
In 2021 however, RailPen decided to re-insource the trading desk, in one of the most high-profile U-turns on outsourced trading, dealing a blow to BNP Paribas’ unit.
As outsourced trading continues to grow in popularity among the buy-side – whether it’s an all-in model or a hybrid approach – banks, prime brokers and boutique firms continue to invest in their offerings in a competitive landscape. This has only been furthered by the exit of UBS leaving clients looking for a new home.
Despite the exits of UBS and BNP Paribas from the sphere, many other banks such as BNY, State Street and Northern Trust are investing in their services, while other independents and aspiring service providers have been capturing business in the budding space.