The French banking group reported strong increase in global markets revenues in Q3 2024.
BNP Paribas has posted net revenues of €11.9 billion (US$13 billion) for the third quarter of 2024, an increase of 2.7% compared to the prior year quarter.
[Revenues were] particular strong in prime and stable overall in equity derivatives - Lars Machenil, CFO
Revenues were boosted by a strong quarter for the corporate & institutional banking (CIB) division – up 9.0% year-on-year (YoY) – driven by all three business lines, but especially the global markets’ unit where revenues, at €2 billion, increased by 12.4% versus Q3 2023.
Equity & prime services revenues were up 13.2% YoY, driven by prime services, particularly in the Americas and Asia Pacific.
‘[Revenues were] particular strong in prime and stable overall in equity derivatives,’ said Lars Machenil (pictured), group CFO, speaking during the presentation of the Q3 results on 31 October.
Fixed income, currency, and commodities (FICC) revenues increased by 11.8% compared to Q3 2023.
BNP Paribas: Global Markets - trend in revenues (€m)
Source: BNP Paribas
Commercial, personal banking & services (CPBS)
CPBS revenues, at €6.6 billion, decreased by 2.6% YoY, impacted by less favourable market conditions in the Belgian market, where BNPP has been adapting to a significant market disruption that could continue for a few quarters, according to Machenil.
‘Belgium is a point of attention,’ he said.
[In Belgium], our commercial strategy created in response to the market reaction to government bonds that matured in September has been to provide customers with medium-term certainty - Lars Machenil, CFO
End-of period deposits rose by 3.2% in Belgium versus Q3 2023, driven by the investment products offered when the one-year Belgian government bond that sold €22 billion matured.
‘[In Belgium], our commercial strategy created in response to the market reaction to government bonds that matured in September has been to provide customers with medium-term certainty rather than matching the short-term high-rate products in the market,’ said Machenil.
In August, BNP Paribas Fortis started a campaign aimed at its mass affluent and private banking clients, specifically designed to help recover lost deposits from the government bond. Since then, the bank launched, among others, five publicly offered callable cumulative notes – with coupons of between 3.65% and 4.15% pa – that attracted combined sales of €1.3 billion from Belgian investors, according to SRP data.
CPBS revenues rose in France (+1.6%), Italy (+3.3%) and Luxembourg (+2.8%), but were down 10.8% YoY in Europe-Mediterranean, despite good business drive in Poland.
In France, the bank introduced 236 publicly offered structured products worth an estimated €785m in the quarter, according to SRP data (Q3 2023: €915m from 295 products). The structures, which were issued on the paper of the BNP Paribas Issuance BV vehicle, included 109 products linked to a single stock; 77 products linked to a single equity index; 30 products linked to a basket of shares; and 16 interest-linked products, among others.
Issuance in Italy focused on autocalls and bonus certificates while in Poland BNPP was the number one issuer with a 26% share of the market on the back of 15 structured products worth approximately PLN370m (US$93m).
The bank’s Polish offering included Certyfikat strukturyzowany ‘Roczne Trio II’, a one-year capital protection certificate which is part of its green bond framework. The product is listed in Warsaw for PLN61.5m and offers a conditional coupon of 10% depending on the performance of the shares of Nvidia, Dell, and Renesas Electronics.
In Q3 2024, BNPP issued more than 3,300 structured products in total across 22 different jurisdictions. Other European markets where the bank was active included Switzerland (838 products), Germany (229), UK (28), and Sweden (27).
Outside of Europe, the bank was the manufacturing company behind 924 products issued in Taiwan; 116 products issued in Hong Kong SAR; and 878 unregistered notes in the US. The latter gathered US$1.6 billion, including US$720m that was invested in 338 products linked to the S&P 500.
IPS and private banking
Investment & protection services (IPS) achieved a strong quarter in asset management and insurance while wealth management revenues were stable compared to a high Q3 2023 base.
As of 30 September 2024, assets under management (AuM) came to €1.3 trillion (+8.7% versus end-Dec 2023) and broke down as follows: €616 billion in asset management and real estate; €456 billion in wealth management; and €272 billion in insurance.
At the end of September, BNP Paribas announced it had signed an agreement for the acquisition of HSBC’s private banking activities in Germany, with the ambition to position BNP Paribas Wealth Management among the top leading players in Germany and bringing its AuM to more than €40 billion.
The group’s immediately available liquidity reserve came to €467 billion as of 30 September 2024, equivalent to more than one year to manoeuvre in terms of wholesale funding.
The common equity Tier 1 ratio stood at 12.7% end-September, down by 30 basis points compared to 30 June 2024 but remaining far above supervisory review and evaluation process (SREP) requirements (10.27%) and the 12% group objective.
Click the link to read the full BNP Paribas third quarter 2024 results and presentation.
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