BNP Paribas has reported revenues for its corporate and institutional banking (CIB) division in the second quarter of 2018, at €2.9 billion, were down by 6.8% from the second quarter of 2017. CIB operated in a less favourable market environment in Europe compared to 2Q17, according to the bank, although revenues of the equity and prime services business, at €718m, were up 12.1%, driven in particular by good level of client volumes in equity derivatives and the development of the prime services business.
For the first half of the year, CIB's revenues, at €5.8 billion, were down by 8.3% compared to the first half of 2017, with revenues in equity and prime services again bucking the trend (+15.6%) mainly thanks to the recovery in client volumes in equity derivatives.
Revenues for the global markets division, at €1.4 billion, were down by 5% compared to 2Q17 as a result of a less favourable market context for fixed income, currencies and commodities (FICC) in Europe, partly offset by a good level of volumes for equity and prime services. The revenues of FICC (€729m) were down by 17.4% compared to 2Q17 with client business in rates still weak in Europe and an unfavourable market context in forex and credit.
BNP Paribas sold 104 structured products worth an estimated €963m to retail investors across eight different jurisdictions during the second quarter of 2018 (2Q17: €684 from 102 products), according to SRP data. In France, the bank collected €545m from the sale of 38 products which were distributed, among other, via Privalto, Equitim, Hedios Vie and MMA Assurances while in Belgium the majority of sales - €162m from a total of €193m - came from 20 products sold via the BNP Paribas Fortis network.
In Germany, BNPP launched 16 primary market products during the quarter, however, the bank also issued more than 43,000 listed certificates such as turbos, bonus and capped bonus certificates, which were available for trading at the exchanges of Frankfurt and Stuttgart.
Outside Europe, the bank was active in Japan were it sold 20 products worth a combined JPY41 billion (€316m) via a number of securities companies including Chugin, Diawa, Mitsubishi UFJ Morgan Stanley and SBI.
BNP Paribas' wholesale medium/long term funding plan for 2018, at €28 billion, can be broken down into €13 billion of structured notes; €3 billion of secured funding allocated equally between covered bonds and securitisation; €10 billion of non-preferred senior debt; and €2 billion of AT1 and Tier 2 issuances. As at July 19, 2018, 80% of the 2018 total funding plan had been completed, according to the bank.
The bank's insurance and wealth and asset management's businesses continued their growth with assets under management (AUM) reaching €1,060 billion as at June 30, 2018 (+2.7% compared to June 30, 2017) and up by 0.9% compared to December 31, 2017, with a good level of net asset inflows at wealth management in particular in Asia, France and Italy.
Group revenues totalled €11.2 billion, up by 2.5% compared to the second quarter of 2017 which included the impact of -€200m in own credit adjustment (OCA) and own credit risk included in derivatives (DVA) as well as €85m in capital gains from the sale of Euronext shares.
'Revenues, driven by the specialised businesses, increased in the context of economic growth in Europe despite an unfavourable foreign exchange effect and less favourable financial markets compared to the second quarter 2017,' said Jean-Laurent Bonnafé (pictured), chief executive officer, commenting on the results.
Click the link to view the full BNP Paribas 2Q18 and 1H18 results and the presentation.
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