1. Max Jadot - "Banking in an uncertain
environment: the challenges of the coming
years"
Introduction by Michel Vermaerke, CEO Febelfin – Financial
Forum 7 June 2011
Your Excellencies,
Ladies and Gentlemen,
Ilya Prigogine, Belgian Russian Nobelprice winner for chemistry, said: „The future
is uncertain …but this uncertainty is at the very heart of human creativity‟.
First of all, it is a great honour and true pleasure to introduce the speaker and the
topic of this evening. „Banking in an uncertain environment: the challenges of the
coming years‟ is a topic that, I guess, has unfortunately not only become quite
familiar to all of us in recent times, but also poses a true strategic challenge
to all financial institutions around the globe, in Europe and therefore also in our
own country.
At Febelfin, as early as 2009, we defined our sector wide strategic agenda and
as a result, we see three priorities: restoring confidence, being a constructive
partner in the debate on the financial architecture and ensuring the future of
banking and finance activities in and from Belgium. The theme of tonight has a
direct link with the overall strategic dimension of our agenda. And we
Belgian Financial Sector Federation
Rue d'Arlon 82 - 1040 Brussels | http://www.febelfin.be
T + 32 2 507 68 11 | F + 32 2 888 68 11
v. 0.8

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could not have wished for a more prominent speaker than the recently appointed
new CEO of the largest bank in our country, Mr Max Jadot.
The process of strategic repositioning of the financial sector and its actors
happens at all levels, i.e. at the international level – within the G20 - as well as at
the European and Belgian level.
Regulatory change is all around and affects every possible part of banking.
Of course, there are the current and yet to come new prudential norms and
standards (the so called Basle 3), but there is much more in the pipeline. Just
trying to provide a summary of all the “chantiers” which have been opened
and which will impact banks and their activities, would take me too far for this
“mot d‟introduction”. But be it sufficient to say, that the regulatory cost will
significantly, if not dramatically, go up, as well as the cost to ensure compliance
and the need to provide proper training and development of the people in the
field and to ensure proper reporting to the authorities.
Take Basle III for instance. These future capital and liquidity standards will
impose on financial institutions the obligation to raise both the level and the quality
of their capital and will have a profound impact on the asset side of their balance
sheet. Banks are in the process and will have to further strengthen their capital
buffer or as our Dutch neighbours put it in their typically expressive
language: “Buffers. Nederland moet meer vet rond de botten krijgen.” (Quote
from NRC Handelsblad of 27 April 2011: Buffers, buffers, buffers. Nederland moet

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weer vet op de botten krijgen. Dat is de overkoepelende boodschap van Lex
Hoogduin, directeur bij de Nederlandsche Bank (DNB)).
Not only is regulation being profoundly adapted to the lessons drawn from the
recent crisis, but also supervision has been reengineered, restructured and
redefined at the international, European and Belgian level. The Belgian Parliament
has been examining the question and has decided to reform our own supervisory
structure and architecture. This has resulted in a far-reaching reform of
supervision in Belgium laid down in the „Twin Peaks Law’, which came into effect
more than two months ago.
In addition to the changes in the field of regulation and supervision, the sector has
also been confronted with the so-called “global banking tax debate”, resulting
in our own country in a contribution levy or fee of 15bp on retail deposit volumes
of more than 310 billion euro or an annual recurring cost of almost 500 million
euro. For the years 2010 and 2011 an additional 5 bp extra levy has been charged,
resulting in a cost of 1.4 billion euro for 2009, 2010 and 2011.
Furthermore, there has been a debate on banking secrecy and this duty of
banking discretion is also undergoing further changes with an obligation for banks
to provide the central bank in the near future with data on bank accounts to be
made accessible to tax authorities. The modalities are still being fine-tuned, but
inevitably banks will have to adapt and ensure compliance.

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These changes, however, are profound and likely to have a long term impact,
intended and sometimes unintended. The banking sector has expressed concern
about the possible cumulative impact of all these changes and appreciates the fact
that the authorities have at least built in a review process for dealing with the
unintended consequences of Basle III, if ever the latter should materialize.
The Belgian banking sector‟s stands on all these regulatory and supervisory
changes can be summarized as follows. We very much want to be cooperative and
constructive partner exploring through a constructive quality dialogue on how best
to achieve and implement these changes. In this respect, we make a plea for a
level playing field, proportionality and a cumulative impact assessment. A level
playing field is key, as our economy is open and international with a banking
landscape with 82% of all banks having their decision centre outside of Belgium
and taking more than 60% market share. Proportionality is important to
preserve a well-diversified landscape and implies that the rules are the same for
everyone, but in the application and implementation one takes into account the
size and the risk profile of financial institutions. A cumulative impact
assessment is fundamentally important for measuring the impact on the banks‟
lending capacity and therefore their capacity to finance the economy. That
being said, let it be noted that since 2007, the banks in this country have been
providing an extra 15 billion euro in corporate lending and 40 billion euro in

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mortgage credit, i.e. a total amount outstanding (encours) to households
and companies of about 310 billion euro.
Ladies and gentlemen, this is the framework and the background against which
our sector and the banks are also strategically positioning and repositioning
themselves. And this also raises the question of the future of banking activities in
Belgium and from within Belgium to the rest of the world.
I am most confident that this evening will be very interesting and most
informative, not only because of the topic that has been chosen but also because
of the speaker who will deal with it. I am sure that Max Jadot, who has been at
the helm of BNP Paribas Fortis for more than three months now, will capture the
attention of each and every one of you.
Mr Jadot indeed is a commercial and merchant banker with an outstanding
reputation and curriculum.
Some milestones in his already impressive career will illustrate this :
After his graduation, as a law student, from the Catholic University of Leuven and
the Georgetown law school in Washington, he went to work for Générale de
Banque in 1983. Working not far from here at the counter of the Place Madou
office, he started in the field (“sur le terrain”). This has marked him from the
beginning as a man and a banker with very hands on experience and knowledge of
the field; He quickly moved upward to become the head of a whole series of
functions and responsibilities within the bank to become early on already the

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manager in charge of marketing for the Brussels area. Having spent some 15 years
in retail banking, he moved on to merchant banking and became head of the
Corporate Finance Department of Générale de banque.
I have been told that when, in 1999, Générale de banque became part of Fortis,
unlike others, he decided to stay aboard given his commitment to his team. His
function at Fortis was that of managing the merchant and investment bank. One
of his many achievements was the initial public offering of InBev Breweries, which
even today, still ranks among the most important initial public offerings ever to be
set up in Belgium. Max Jadot has played a major role in the successful organization
of this initial public offering. As a gifted mediator, he succeeded in reconciling the
interests of the different stakeholders.
His long career in the field of corporate finance and investment banking of course
has given him expert knowledge of the Belgian corporate world, a world he is
also familiar with thanks to his family ties and his membership of the Bekaert
Board of Directors. Max Jadot is the great-grandson, in direct line, of Léon Bekaert,
who founded the Bekaert company. The success of Bekaert over these last few
years is the result of a clear strategy in combination with a stable shareholdership.
Max Jadot is widely considered as one of the key contributors to this success.
However, at the beginning of 2007, he made a major career move by becoming
chairman of the Executive Committee and Country Manager of Fortis
France, an entity which had to be reorganized without delay, and he brilliantly

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succeeded in doing this. He was one of those who quietly yet firmly stood strong
all through the crisis that resulted in Fortis Bank being taken over by BNP Paribas
in 2008.
He continued to achieve remarkable results and so, quite naturally, he was the
person one turned to when the direction of the former Fortis Bank had to be
entrusted to a Belgian banker. As a banker by nature yet capable of showing
great discretion, he has now become Belgium‟s prime banker and the face of
Belgium‟s leading bank.
He will be directly confronted with the current challenges or should I say
sometimes ’struggles’, the first one having to do with capital requirements. In the
future, we shall be witnessing an internal proverbial war between business
lines within one and the same bank. According to the Basle III rules, both the
level and the quality of capital must be raised. Consequently, there will be tensions
when a decision has to be taken about spending capital on one particular activity
or market rather than on another. Some difficult choices will have to be made.
Next, there will be a struggle for deposits between the institutions, since in the
long term, according to a recent study by Société Générale, the European banks
may well need
stable means for their funding up to an amount of 1,800 billion EUR. This will also
have consequences for the funding of the economic activity, for the loan/deposit
ratio will have to be reduced. This process of credit becoming more scarce and

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more expensive will hit SMEs harder, because their capacity for finding direct
funding on the financial markets is not the same as that of big companies.
Finally, the biggest struggle may actually be in the field of services to be
provided. The crisis has sharpened the expectations of the customers, who are
looking, among other things, for a straightforward and more outspoken ethical
attitude from their banker and who have become utterly sensitive about prices.
Customers want their bank to be innovative when it comes to services being
offered and rendered.
His expertise as a banker should make Max Jadot very well capable of
successfully dealing with all those challenges, more than anyone else.
But to conclude, one thing you probably do not know, is that the CEO of Fortis
Bank is also known as „Monsieur Astérix’ at BNP Paribas. This anecdote goes
back to the period immediately after the acquisition of Fortis Bank exactly two
years ago.
As is the custom for all heads of Businesses, Max Jadot had to give a presentation
of his activities and by way of introduction and so as to make him known better,
he handed out a copy of „Astérix chez les Belges‟ to the audience.
Max has been keeping up this tradition and almost all of his speeches hold a
reference to Astérix.

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Frankly, I do not know if and when there will be hint to Astérix (this evening), but
Harold Geneen, former CEO of ITT once said: „Uncertainty will always be part of
the taking charge process‟. Mr Jadot, the floor is yours.