BNP Trading Bonanza Cushions Against Soaring Provisions
July 31 2020 - 01:38AM
Dow Jones News
By Pietro Lombardi
BNP Paribas SA said Friday that heavy client activity boosted
the performance of its markets operations, which helped absorb a
sharp increase in provisions against potential losses from
borrowers also seen at many peers.
The investment bank arm of France's largest-listed bank by
assets enjoyed a strong second quarter, mirroring a trend seen at
several U.S. and European competitors. This helped BNP's net profit
fall less than analysts had expected.
The lender set aside 1.45 billion euros ($1.72 billion) in the
quarter to cover credit losses as it prepares for the impact of the
coronavirus pandemic. In the same quarter last year, provisions
were EUR621 million. The second-quarter provisions add to the
EUR1.43 billion it stowed away in the first quarter.
Despite the soaring provisioning, net profit for the period fell
just 6.8% to EUR2.30 billion, well above the EUR1.52 billion
analysts had forecast, according to a consensus provided by
FactSet.
At EUR11.68 billion, a 4% increase on year, quarterly revenue
also beat expectations, fueled by a 33% increase at its investment
bank division.
Global markets revenue jumped almost 64% thanks to "an
exceptional performance" of its fixed-income operations, the
revenue of which more-than doubled to EUR2.01 billion from the
EUR793 million it had a year earlier. Equities revenue, which
collapsed in the first quarter, fell 53%.
BNP's core Tier 1 capital ratio--a key measure of capital
strength--was 12.4% in June, up from 12% in March.
Write to Pietro Lombardi at pietro.lombardi@dowjones.com;
@pietrolombard10
(END) Dow Jones Newswires
July 31, 2020 01:23 ET (05:23 GMT)
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