BNP Paribas is the first major French bank to unveil its results for the second quarter of 2020, a period which covers a large part of the confinement. The rue d’Antin bank managed to resist this unprecedented shock wave. Its profit is certainly down by nearly 6.8%, but it amounts to more than 2 billion euros (2.29 billion). For comparison, thea Spanish bank Banco Santander on Wednesday published a net loss of 11.13 billion euros. A first in its history.
BNP Paribas’ profit is notably impacted by the cost of risk, which, as expected, is soaring. This corresponds to provisions made to deal with possible reimbursement accidents. In the second quarter, it amounted to 1.4 billion euros, the same amount as in the first quarter, and up 826 million euros compared to the second quarter of 2019.
Rising cost of risk
Between April and June, the group specifies having revised upwards its provisions to the tune of 329 million euros for “expected losses”, meaning that 1.1 billion euros have already been lost in bankruptcies and payment defaults.
“The cost of risk will be higher than in the first quarter because French banks update their macroeconomic scenario with more stringent assumptions than those used in their models in the first quarter. There should be a peak in provisions in the second quarter”, warned Lorraine Quoirez, analyst at UBS.
Revenues boosted by the CIB
Regarding its net banking income (NBI), more or less the equivalent of turnover, it increased by 4% to 11.7 billion euros, driven by its corporate banking and financing activities. investment (CIB), up more than 33% compared to the second quarter of 2019.
“The division’s revenues, at 4,123 million euros, grew strongly thanks to extremely sustained activity from all customers. Revenues were up in all three businesses: a very good performance from Corporate Banking (+ 15.0% ), a very strong growth of Global Markets (+ 63.5%) and an increase in the activity of Securities Services (+ 3.6% 2) “, details the banking group.
Between January and June, BNP Paribas, which took from Santander the title of first bank in the euro zone in terms of stock market valuation, explains having organized “more than 250 billion euros of financing in the world including 166 billion euros in Europe”. The CIB (corporate and institutional banking) division thus offsets the decline in income from retail banking activities (-5.2%), which was more affected by the confinement period.
Retail banking in decline
“This decrease reflects the impact of the low interest rate environment and that of the health crisis, in particular on the level of commissions, which are only partially offset by the increase in loan volumes and the strong activity of the specialized businesses”, explains the bank in a press release.
The bank specifies that it has granted more than 90,000 loans guaranteed by the States in the world, but also nearly 250,000 moratoriums, both on private customers (25%) and business customers (75%).
(With hooly News)