BNP Paribas’ structured products sales up by almost 30%

BNP Paribas posted revenues of €11.2 billion in the fourth quarter of 2021, an increase of 3.7% compared to Q4 2020, according to the latest results published by the French international banking group. Revenues for full year 2021, at €46.2 billion, increased by 4.4% compared to 2020.

Q4 2021 revenues in corporate & institutional banking (CIB), at €3.3 billion, decreased by 1.5% compared to the high base of the prior year quarter.

Global markets revenues were down 10.7% from Q4 2020 while revenues in fixed income, currencies and commodities, at €755m, decreased by 24.6%, in a challenging market, particularly in rates.

Equity & prime services revenues increased by 17.4% and included the contribution of the integration of BNP Paribas Exane (close to €95m) and a strong momentum in prime services but lower client activity in equity derivatives this quarter.

However, backed by the diversification of its franchises, global markets revenues for FY2021, were stable at €6.8 billion, compared to the high base of 2020.

They were driven in particular by sustained client activity on the equity markets, with continued strong activity in derivatives – structured products in particular – and growth in prime brokerage.

The bank led by Jean-Laurent Bonnafé (pictured), issued 840 structured products worth an estimated US$3.8 billion on the primary market in Q4 2021, an increase both by issuance and sales volumes compared to the same quarter the previous year, according to SRP data (Q4 2020: US$3 billion from 587 products).

In full year 2021, the bank collected estimated sales of US$13.1 billion from 2,363 primary market products (FY2020: US$10.1 billion from 2,266 products), up 29.7% yoY.

Products in Q4 were available across 15 different jurisdictions.

In its local market France, the bank accumulated sales of US$1 billion from 138 products, an increase of more than 70% by sales volume compared to Q4 2020 (US$590m from 158 products). All but two of the products issued had an autocall feature and the vast majority were tied to a single index (94 products), of which the Solactive France 20 Equal Weight NTR 5% AR Index was the most frequently used (13 products).

Other European markets where the bank was active during the quarter included Belgium (US$39m/eight products), Germany (US$46m/51 products), and Italy (US$141.5/19 products).

Outside of Europe, the French bank was the manufacturer behind 566 products that were targeted at private banking clients in Taiwan. Of these, 94% were autocalls that were distributed via local banks and securities houses.

In Japan, the bank issued 20 products worth US$210m, including 複数指数連動 M20241213,a three-year registered note on the S&P 500 and Nikkei 225 that became BNP’s best-selling product of the quarter with sales of US$31m.

On the secondary market, BNP Paribas was the third most active issuer of leverage certificates listed on the exchanges of Frankfurt and Stuttgart in Germany – behind J.P. Morgan and Société Générale.

It launched 93,133 turbos in Q4 2021, with indices such as the local Dax (15,052 products), Dax/Xdax (7,372), Nasdaq 100 (4,542), and DJ Industrial Average (4,044) the preferred underlying asset for the German investor. Equity shares, such as Tesla (1,955) and Biontech (1,427) were also in demand while crude oil was the commodity of choice (WTI crude oil 1,336 products/Brent crude oil 1,196).

Listed products were also launched in Hong Kong SAR, where 474 warrants and callable bull bear contracts (CBBCs) where issued, including 294 on the Hang Seng Index.

BNP completed its 2021 medium to long-term regulatory issuance plan of €20.5 billion, which can be broken down into €15.4 billion non preferred senior debt and €5.15 billion capital instruments.

The group’s immediately available liquidity reserve totalled €452 billion, equivalent to more than one year of room to manoeuvre in terms of wholesale funding.

As of 31 December 2021, assets under management (AuM) stood at €1,271 billion, an increase of 9.1% compared to 31 December 2020, mainly due to a favourable market performance impact of €59.4 billion and good management performances. They also benefited from a favourable exchange rate impact of €15.9 billion.

AuM were split as follows: €567 billion at asset management; €422 billion at wealth management; and €282 billion at insurance.

Click the link to read the BNP Paribas Q4 and full year 2021 results, presentation and consolidated financial statements.