BNP Paribas reports strong growth equity derivatives in 2015

BNP Paribas has reported increased revenues in equity derivatives for its corporate and institutional banking (CIB) division in 2015. The revenues of the equity and prime services business unit, at €2.1bn, were up by 23.6%, due to a strong growth at prime services and equity derivatives while revenues for fixed income instruments, currencies and commodities (FICC) at €3.9bn were up by 15.2% with the bank reporting a good performance of forex, rates and credit and a more lacklustre context in the primary bond market. Securities services' revenues, at €1.8bn, increased by 14.1% following the effect of a rise in the number of transactions (+12.6%) and assets under custody (+9.1%), BNP Paribas said.

For the whole of 2015, at €11.7bn CIBs revenues rose by 13.2% compared to 2014, according to the French bank's full year 2015 results.

BNP Paribas sold 480 structured products via its retail distribution network across nine European countries during 2015, claiming a share of 7% of the European market, ahead of Vontobel, Intesa Sanpaolo, Credit Agricole and Banco Populare, according to SRP data. The products, of which the vast majority (438) were wrapped as securities, collected sales of €6.3bn.

In its home market of France, BNP Paribas issued 73 structured products worth €1.7bn in 2015, up from 51 structured products with a sales volume of €1.2bn the previous year. The bank also acted as the third-party issuer for another 28 structured products sold through distributors such as Finance Selection, LinXea, Nortia and Oddo AM.

In Belgium, another core European market for BNP Paribas, the bank issued 50 structured products to retail investors with a sales volume of €780m, while another nine structured products worth €28m were targeted to the country's private investors. The bank's best-selling structure in Belgium was the Smart Invest Bon SRI Europe 11, a joint venture with AG Insurance, which collected €61m. The life wrapped product which has a term of 10-years is linked to the Ethical Europe Equity index, which was developed by Solactive at the request of BNP Paribas. Across Europe 35 structured products with combined sales of €1.9bn, including offerings from Argenta, Crelan, Expander, La Banque Postal and World Bank were linked to the index in 2015.

BNP Paribas had a share of 22% of the Italian market, where it sold 210 structured products worth €3.2bn, via its subsidiaries BNL (171 products) and Exane Derivatives (39 products), respectively. In Germany - where the bank's main focus lies with listed certificates - it issued 105 tranche products; 110,004 flow products, such as capped bonus certificates and discount certificates; and 111,359 leverage certificates during 2015.

For the whole of 2015, BNP Paribas' revenues totalled €42.9bn, up by 9.6% compared to 2014. Revenues of all the operating divisions were up from the previous year with the bank reporting solid performances by domestic markets (+1.6%), a strong rise at international financial services (+14.5%) and CIB (+13.2%).

Operating expenses, which amounted to €29bn, were up by 10.3%, according to the bank. They included one-off items for a total of €862m: €793 million euros for the Simple & Efficient transformation costs and acquisitions' restructuring costs (€757m in 2014) as well as a €69m contribution to a dedicated fund for the resolution of four Italian banks.

Pre-tax income came to €10.4bn compared to €3.2bn in 2014, up by 13% for the operating divisions, the bank said. The group generated €6.7bn in net income attributable to equity holders (€157m in 2014), while the return on equity was 8.3% (9.2% excluding one-off items). The return on tangible equity came to 10.1% (11.1% excluding one-off items). The net earnings per share was at €5.14

Click here to view the BNP Paribas 2015 full year results and here to view the presentation.