Business News: BNP Paribas sees a slow down despite 60% income unit surge.
The commercial gold mine launched by major lenders during the Covid-19 pandemic led to a nearly 60% increase in BNP Paribas’ fixed income revenues in 2020, but the bank has warned this is unlikely. continue in 2021.
The French bank earned € 5.7 billion in its fixed income division in 2020, a 59% increase from the previous year, pushing its global market unit up 22% to € 6.8 billion.
In the fourth quarter, however, the bank’s fixed income unit fell short of analysts’ expectations, raising profits by 22% to around € 1 billion. BNP Paribas’ market activity is heavily focused on fixed income trading, although the collapse of complex equity derivatives in the first quarter hit French banks as a group particularly hard.
BNP Paribas has been hit less hard than rivals Société Générale and Natixis, both of which have since announced a reorganization of their equity trading units, but the unit’s revenues are still down 42% this year to 1.2 billion. EUR. BNP said in a statement that after “exceptional shocks” in its capital unit in the first quarter, activity returned to normal in the second half of the year.
The French bank is likely to reap the benefits of acquiring parts of Deutsche Bank’s closed trading business in the next year, as it complements the acquired prime brokerage business from the German lender.
Overall, the revenues of BNP Paribas’ Corporate and Institutional Banking division increased by 14% to 13.8 billion euros. In the early days of the pandemic, it rushed to provide clients with vital liquidity on the debt and equity capital markets and on loans and was a major beneficiary of the crisis among European investment banks.
According to data provider Dealogic, BNP Paribas ranked fourth among investment banking commission earners in Europe, the Middle East and Africa in 2020, rising from sixth the year before. It was the only European bank in the top five.
However, the investment banking division’s operating costs only increased by 3%, which, according to the bank, was due to “business growth,” indicating caution in paying bonuses to staff.