BNP Paribas Profit Steady as Trading Booms -- Update
2020年11月3日 - 08:32PM
Dow Jones News
By Simon Clark
BNP Paribas SA's net profit held steady in the third quarter as
income from trading securities offset a decline in retail banking
earnings.
France's biggest bank said net profit for the three months to
Sept. 30 was EUR1.89 billion, equivalent to $2.2 billion, slightly
down from the same period in 2019. Pretax profit from the
Paris-based bank's global markets unit soared 67% to EUR648
million. BNP Paribas's shares rose more than 5%.
European banks have reported better-than-expected results for
the third quarter as the coronavirus pandemic hit the economy. It
is unclear if the progress can continue as France, Germany and
other nations lock down their populations to stem soaring infection
rates.
BNP Paribas Chief Executive Jean-Laurent Bonnafé said the bank
was demonstrating high resilience in extraordinary times.
European governments have provided hundreds of billions of euros
of financial support to companies and workers to prop up the
economy and banks. In exchange, the European Central Bank told
banks to refrain from paying cash dividends in 2020. BNP Paribas's
common equity Tier 1 ratio rose to 12.6% from 12.1% in the first
nine months of the year, partly because it didn't pay
dividends.
France and Germany announced new lockdowns last week and the
U.K. government said England is set to follow this week under the
pressure of mounting cases and deaths. French President Emmanuel
Macron has announced tough restrictions requiring people to remain
inside their homes while restaurants, bars and shops deemed
nonessential close.
Some investors and analysts worry the government support has
kept the real extent of problem loans and underlying damage to bank
balance sheets at bay and that a clearer picture will emerge only
when these programs end. BNP Paribas said provisions for bad loans
rose 47% to EUR1.25 billion in the third quarter of the same period
last year. The provisions declined from the previous quarter, in
which EUR1.45 billion was set aside.
The French bank joined London-based Barclays PLC and
Frankfurt-based Deutsche Bank AG in reporting strong results from
trading and investment banking during the third quarter.
The Stoxx Europe 600 Banks index has fallen 38% this year. BNP
Paribas's shares are down 37% in 2020, faring better than crosstown
rival Société Générale SA, whose shares have fallen 59% after the
bank was hit by coronavirus-related trading losses in its
investment bank. Société Générale will publish its third-quarter
results Thursday.
Write to Simon Clark at simon.clark@wsj.com
(END) Dow Jones Newswires
November 03, 2020 06:17 ET (11:17 GMT)
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