BNP Paribas’ equity derivatives activity back to normal

BNP Paribas has posted revenues of €44.2 billion (US$53.2 billion) in the full year 2020, almost stable (-0.7%) compared to 2019.

In the fourth quarter of 2020, revenues, at €10.8 billion, were down by 4.5% compared to Q4 2019.

Global markets revenues were up by 22.4% compared to 2019, driven by sustained client activity

In the operating divisions, corporate and institutional banking (CIB) revenues, at €13.7 billion, were up 13.9% compared to 2019. After the ‘extreme shocks’ in the first half of 2020 – in Q1 2020, with the -€184m impact of restrictions by European authorities on the payment of 2019 dividends – activity normalised in equity derivatives in the second half of 2020.

Global markets revenues were up by 22.4% compared to 2019, driven by sustained client activity. Fixed income, currencies and commodities (FICC) revenues achieved 58.6% growth, however, equity and prime services revenues, were down by 41.9% compared to 2019, due to the ‘exceptional shocks’ of the first quarter of 2020. Corporate banking revenues rose by 9.6% and securities services revenues, were up 2.3% at constant scope and exchange rates compared to 2019.

In the fourth quarter 2020, CIB’s revenues, at €3.3 billion, rose by 6.9% compared to the fourth quarter 2019 with growth in global markets (+11.8%) and corporate banking (+5.9%) but a slight decrease in securities services (-2.8%).

Globally, BNP Paribas issued some 1,918 publicly offered structured products worth an estimated US$9.1 billion (€7.6 billion) in full year 2020, according to SRP data. These figures, which do not include listed flow- and leverage products, are slightly down from the prior year (2019: US$10.7 from 1,833 products).

In Europe, the bank was especially active in France, where it gathered US$2.6 billion from 571 products (FY2019: US$3.2 billion from 414 products), while Italy (€1.4 billion from 168 products) and Belgium (€436m from 41 products) were also busy markets.

In Asia, BNPP was the manufacturing company behind 701 private placements (US$2.4 billion) targeted at investors in Taiwan, that were distributed, among others, via Fubon, Cathay, UBS and Sinopac.

Its best-selling product for 2020 was sold in Japan, where Mitsubishi UFJ Morgan Stanley Securities collected US$228m with ノックイン債/KI M20231211, a three-year registered note linked to the Eurostoxx 50.

Issuance in the Americas was limited in 2020, with 44 products sold in Brazil (via XP Investimentos) and a further four targeted at investors in the US.

In Q4 2020, BNP Paribas issued 469 products worth an estimated US$2.4 billion (Q4 2019: US$2.5 billion from 369 products). The products were sold across 19 different jurisdictions, of which Taiwan (US$931.8 from 261 products) and France (US$522m from 107 products) took the biggest share.

The group’s 2021 medium to long-term (MLT) wholesale funding programme of €36 billion includes a MLT regulatory issuance plan of approximately €17 billion, which can be broken down into €13 billion non preferred senior debt (€4.7 billion already issued) and €4.5 billion capital instruments (€1 billion already issued).

One third of the regulatory issuance plan was realised as at end-January 2021, with the remaining part of the programme to be completed in 2021 with structured products and, to a lesser extent, with securitisation and local funding.

BNP’s immediately available liquidity reserves totalled €432 billion, which is equivalent to more than one year of ‘room to manoeuvre’ in terms of wholesale funding, according to the bank.

As of 31 December 2020, assets under management reached €1.2 trillion which could be broken down as follows: asset management (€512 billion), wealth management (€390 billion), and insurance (€264 billion).

Click the link to read the full BNP Paribas full year 2020 results, presentation and consolidated statement.