LONDON, May 3 (IFR) - A strong recovery in equities trading
enabled BNP Paribas to report a 20% rise in revenues at its
corporate and institutional banking division, in line with US
peers and better than many European rivals, which reported
weaker figures last month.
First-quarter CIB revenues were €3.22bn compared with
€2.69bn in the same period a year earlier when the French bank
reported a 41% fall in equities revenues to €428m. This time
that bounced back by 36% to €580m, which is still below the
€725m level recorded two years ago.
The group’s larger fixed income, currencies and commodities
arm also recovered, with revenues surging by 32% to €1.17bn,
roughly the same level as two years ago. Like others, BNP
Paribas has benefited from strong activity in rates. It also
said FX was “good”, unlike in some banks.
The lender differs from most others by also including fees
from primary debt capital markets in this division. That has
been strong across all banks, in comparison with the unusually
weak period seen a year earlier.
BNP Paribas’ dominant euro-business also benefited from the
European Central Bank’s corporate bond purchasing programme,
which has encouraged many major issuers to come to market before
any possible monetary policy changes.
The bank has outlined plans to reduce annual costs by €900m
in its CIB division over the next three years so cost-to-income
is 64% by 2020. Over this quarter overall divisional expenses
went up 11% to €2.51bn, which was smaller than the top line
However, that still meant cost-to-income was 77.8%, leaving
management with much to do to meet its target. The bank said the
CIB had incurred €43m of one-off “transformation” costs in the
quarter. As part of this it sold a sub-profitable €2.5bn
portfolio of positions.
Nearly half of CIB’s revenues come from resilient businesses
– securities services and corporate banking. The former saw
revenues rise 8.5% to €478m year-on-year, benefiting from new
contracts such as looking after €60bn of assets for Spanish
In corporate banking, BNP Paribas remains a dominant
syndicated loan arranger in Europe. Volumes here rose 7.2%
year-on-year to €135.3bn. In transaction banking the group is
still winning business from a deal to take on RBS clients after
the UK bank pulled out of this area. Revenues across corporate
banking went up 6.7% to €991m.
“The CIB rebounded strongly from a low base in the first
quarter of last year,” said chief executive Jean-Laurent Bonnafe
in a video interview on the bank’s website.
(Reporting by Christopher Spink)