BNP Paribas reports increase in structured product sales

BNP Paribas issued 44,115 structured products in the third quarter of 2019, up three percent from the 42,866 products launched by the bank in the prior year quarter, but down nine percent compared to Q2 2019 when it released 48,508 products, according to SRP data.

The vast majority of BNPP’s products were listed certificates targeted at investors in Germany and Austria. In France, the bank sold 120 structured products – worth approximately €521m – which were distributed via 17 different providers, including, among others, Aréas Assurances, Capitis Conseil, Crystal Partenaires, DS Investment Solutions, Privalto, and Vital Epargne.

Other European markets were the bank was active during the quarter included Italy (€200m from 39 products), Belgium (€88m from 24 products), and Ireland (€47m from 16 products).

Outside of Europe, the French bank was the manufacturing company behind products from XP Investimentos in Brazil, Bank SinoPac, CTBC, Shing Kong Bank and UBS in Taiwan, and Aozora Securities in Japan. The latter also distributed the best-selling BNPP product in the quarter that came in the shape of the five-year Nikkei and Eurostoxx M20240828, which sold JPY5.5 billion during its subscription period (US$51m).

Corporate and institutional banking (CIB) posted revenues of €2.8 billion, up 12% compared to 3Q2018, whilst also reporting sustained growth in its three businesses: global markets (+17.2%), corporate banking (+8.7%), and securities services (+6.4%).

CIB continued its selective growth on targeted clients with the signing of a binding agreement with Deutsche Bank to provide service continuity to asset managers clients of prime brokerage and electronic execution, and including the necessary technology and staff transfer. It also continued the optimisation of certain activities with the signing of an agreement to transfer businesses to the Allfunds fund distribution platform in exchange for a strategic 22.5% stake. Both transactions are subject to regulatory approvals and required authorisations.

At €1.3 billion, global markets’ revenues were up by 14.7% compared to the third quarter 2018 and by 17.2% excluding the effect of the creation of the new Capital Markets platform (a joint platform of global markets and corporate banking which was set up in Q1 2019 to meet the financing needs of corporates).

The revenues of fixed income, currencies and commodities (FICC), at €915m, were up by 34.6% compared to the same quarter last year when the conditions were ‘unfavourable’. They recorded a sharp rise in credit and in primary issues, a rebound in forex and emerging markets and a good performance of rates. The business confirmed its strong positions in bond issues (ranked number one for all bond issues in euros, number eight for all international bond issues and number two worldwide for sustainable bonds).

Equity and prime services’ revenues, at €384m, were down by 15.1% compared to the third quarter 2018 in a lacklustre market on flow activities partly offset by increased volumes of structured products’ issuances and slight growth at prime services.

BNP Paribas' wholesale medium/long term funding plan for 2019, at €36 billion, can be broken down into €33 billion of senior debt – of which €14 billion non preferred senior debt (NPS) – and €3 billion of capital instruments.

As at October 17 2019, €13.4 billion of NPS debt had already been issued, including a 5.5-year, €750m green NPS bond and a six-year, €1 billion Non Call 5 NPS issued on February 21 and July 10 2019, respectively.

The group’s liquid assets reserve immediately available totalled €351 billion, which is equivalent to more than one year of room to manoeuvre in terms of wholesale funding, according to the bank.

Click the link to view the BNP Paribas third quarter 2019 results and the presentation.