Ahead of the final ballot at Fortis's annual meeting in the Dutch town of Utrecht on the sale of the company to the French bank BNP Paribas, the management at BNP Paribas has already worked out the numbers of positions they plan to cut from the business, sources with direct knowledge of the matter say.

Local business heads at BNP Paribas were briefed of the decisions and told to arrive at their respective integration plans overnight yesterday. "The message is: as long as these Fortis guys are not in Belgium, they are out," a source summarises of the group meet. He says the management expects the final vote would do little to alter the sale process.

In asset management, however, a reverse takeover by Fortis is on the cards, at least in Asia. Fortis Investments, which only completed its integration of ABN Amro's asset management business on April 1, 2008, will again be thrown into chaos as it absorbs BNP Paribas Investment Partners' headcount in the region. However, redundancies in overlapping functions will most likely come from BNP Paribas, which has a smaller headcount and lesser profile (especially among sales staff, with most institutional sales having less experience) than Fortis in Asia.

Fortis employs 370 and 150 in Hong Kong and China respectively. Having just freshly spun off its stake in ABN Amro Teda to Old Mutual and kept its more dominant and successful brand, Fortis Haitong in China, there will be new questions asked as to what the new entity should do with BNP's stake in the smaller and weaker brand in China, SYWG BNP Paribas. (SYWG BNP manages an AUM of Rmb10.46 versus Fortis Haitong's Rmb38.50 in China) China's regulators do not allow encourage multiple stakes in fund management companies.

Despite the pain to come, some observers believe that a new BNP/Fortis organisation can become a more powerful player in Asian asset management. Fortis, thanks to its prior acquisition of ABN Amro Asset Management's extensive retail business around the region, has scale and depth. BNP Paribas Investment Partners, an umbrella group for a variety of investment boutiques and for BNP Paribas Asset Management, can bring a number of niche strengths to the table, notably in Islamic investments and in indexed, quant and ETF strategies.

Overall, this is expected to make BNP Paribas Investment Partners a leading fund management brand not just in Asia, but around the world. Globally, the merger will add $265 billion to BNP's AUM of $454 billion.

In Asia, according to AsianInvestor's last survey conducted in late 2008, as of end of September 2008, BNP Paribas (ranked #44) sources $31.5 billion in the region, versus Fortis's $25.1 billion (ranked #48). The combination of the two could easily make it rival its more successful French competitor, SG Asset Management. (SGAM was ranked #28 and had been able to source $52.8 billion over the same period.)

However, SGAM's proposed merger with Credit Agricole Asset Management will still keep it one step ahead.

Neither Vincent Trouillad-Perrot, Asia CEO at BNP Paribas Investment Partners, nor Mark Te Riele, managing director at Fortis Investments for Asia, could be reached by press time. Spokespeople at the investment and group level declined to comment.

In private banking, aside from recent redundancies made in response to cost pressures, sources say the two banks will more or less merge on equal footing. The private bank business will be seen as a major pillar to bolster revenues in corporate investment banking and the combined asset management business.

The original vision of making Fortis's private bank a top 10 player in Asia was not realised in its integration with ABN Amro Private Bank. But this may just be the chance for BNP Paribas to consolidate its positions following the past year's shakeout of client assets. It is the seventh largest private bank, with about $30 billion of assets under management in the region in 2008.

When AsianInvestor first reported this story, we wrote the Fortis group could make up to 800 people in Asia redundant. We now have reason to say this figure is inflated and misleading.

According to an official statement by Fortis, "BNP Paribas has given an undertaking that there will be no forced redundancies, favouring instead mobility within the group and natural attrition." 

According to an official statement by BNP Paribas: "Employment issues relating to the integration will be limited due to the fact that BNP Paribas does not have a branch network in Belgium and Luxembourg. If increased productivity becomes necessary, BNP Paribas has undertaken to deal with it by favouring natural attrition or internal mobility within the Group."

According to data provided by Dealogic, Fortis has seen zero trades for both its DCM and ECM business in the region since 2008; and single ECM issuance globally year-to-date in 2009. In loans, it didn't even make it into the top 50 rankings in the first quarter of 2009. It is ranked the 35th largest bookrunner with just 0.61% market share versus BNP Paribas's number six position with a 2.26% market share in 2008. (Globally, it ranks 58 versus BNP Paribas's number 13 position.)