People passed by BNP Paribas, a French international banking group.
ANGELA WEISS | AFP | beautiful images
LONDON – BNP Paribas beat market expectations on Tuesday thanks to the steady performance of its investment banking unit.
The Bank of France reported net income of 1.89 billion euros ($ 2.20 billion) in the third quarter of 2020, after analysts forecast 1.6 billion euros, according to Refinitiv. The lender also said it had 472 billion euros in liquidity reserves.
Other highlights in the quarter:
- Sales decreased slightly (0.1%) from a year ago to 10.88 billion euros.
- CET 1 (a measure of bank solvency) has risen to 12.6%, compared with 12% a year ago.
- Operating expenses fell 3.8% from a year ago.
Lars Machenil, chief financial officer of BNP Paribas, told CNBC’s Charlotte Reed that the result is a “dedication” to business diversification.
“The revenue is essentially back to the level of a year ago. Second, if you look at costs, they’re (being) falling, perfectly in line with our goal of reducing costs by more than a billion (euros)) this year, “Machenil said, adding that looking at its performance from the beginning of the year until now, the bank is” ahead “in its initial outlook for the year.
BNP Paribas reported revenue growth across all three of its divisions, but CIB (Corporate and Institutional Banking) saw the highest growth of 17% year-on-year. Although quarterly, the same unit saw a decrease of 18.2% in revenue.
“What we saw was that in the first half of the year, demand was much higher than you would normally have. And basically, the decline was a little bit, but still represents a very solid demand,” Machenil said. .
Fixed income, commodities and currency (FICC) contributed with revenue up 34.6% from a year ago thanks to “strong credit”, “foreign exchange and emerging market recovery. and good performance of rates. “
Equity and Prime Services divisions, on the other hand, dropped 15.1% of revenue due to “lackluster market”.
The results come at a time when governments across Europe intensify social constraints as they grapple with a second wave of coronavirus infection. However, BNP Paribas eased the impact of the restrictions further, arguing that the second round of account locks were slightly different from those in March.
“The door locks are of a different nature from what we’ve seen in the past, so that’s why we feel comfortable repeating our instructions throughout,” said Machenil. year”.
At the end of the second quarter, the French lender proposed that its profits would drop between 15% and 20% by the end of the year due to the coronavirus crisis.
Shares of BNP Paribas have fallen about 42% since the beginning of the year.