BNP Paribas has reported revenues for the second quarter of 2016 totalled €11.3bn, up by 2.2% compared to the same period last year. They included the exceptional impact of €597m of the capital gain from the sale of Visa Europe shares as well as the -€204m in own credit adjustment (OCA) and own credit risk included in derivatives (DVA) (€80m in 2Q2015), according to the bank.
"In the second quarter BNP Paribas performed good results and solid organic capital generation [...] an integrated business model fuelled by cross-selling," said Lars Machenil (pictured), chief financial officer (CFO), during the live webcast of the 2Q2016 results on July 28.
Revenues of the corporate and institutional banking (CIB) business, at €3bn, were up by 1.4% compared to a high base in the second quarter of 2015, which benefited from a favourable environment, the bank said.
At €1,5bn, global markets' revenues were up by 2.1% year-on-year. They rebounded significantly compared to the first quarter of 2016 due to a significant pick-up in client volumes, according to the bank.
Fixed income, currencies, and commodities (FICC) revenues, at €1bn, were up by 16.7% from 2Q2015 with sustained business in rates and forex and good performances on credit and bond issues where the business unit confirmed its positions (ranked number one for all bonds in euros and number eight for all international bonds), the bank said.
The revenues of the equity and prime services (E&PS) business unit (€509m) were down by 18.7% compared to a very high base in the second quarter 2015. The value at risk (VaR), which measures market risks, was at a very low level this quarter (34 million euros).
Securities services' revenues (€461m) were down by 2.6% due in particular to the decrease of equity markets and a decline in the number of fund subscription and redemption transactions against a wait-and-see backdrop by investors, while corporate banking revenues (€1bn) were up in Europe and in the Americas and held up well in Asia Pacific where the environment was more lacklustre, according to the bank.
Assets under management (AUM), at €967bn, for insurance and wealth and asset management were up by 1.9% from their level at June 30, 2015. AUM rose by €13bn compared to December 31, 2015 due in particular to positive asset flows totalling €15.6bn with significant asset inflows at wealth management in particular in the domestic markets and in Asia; good asset inflows at Asset Management, in particular into diversified and bond funds; good asset inflows in insurance in the domestic markets, the bank said.
As at June 30, 2016, AUM was broken down as follows: asset management (€393bn), wealth management (€331bn), insurance (€220bn) and real estate services (€22bn).
BNP Paribas sold 154 structured products via its retail distribution network across Europe during 2Q2015, claiming a share of 12% of the European market, ahead of Vontobel (10%), Intesa Sanpaolo (9%), Commerzbank (7%) and Deutsche Bank (6%), according to SRP data. The products, of which the vast majority were wrapped as securities, collected sales of €3.4bn.
In its home market of France, BNP Paribas issued 10 structured products worth €201m in the second quarter, down from 19 structured products with a sales volume of €504m during 2Q2015 and also down from the previous quarter when 14 products worth €198m were issued by the bank.
In Belgium, another core European market, the bank issued 12 structured products to retail investors with a sales volume of €218m. The bank's best-selling structure in Belgium was the BNP Paribas Fortis Funding (LU) Coupon Note Europe Select 2025/2, which sold €42m during its subscription period while Smart Invest Bon Diversified Europe 2, a joint venture with AG Insurance, collected €27m. The latter, a 10-year capital protected unit-linked life insurance product, participates for 80% in the Stoxx Europe Diversification Select 50 EUR index, subject to 30 months back-end averaging.
BNP Paribas had a share of 28% of the Italian market, where it sold 97 structured products (€2.9bn), the majority of which were distributed via the bank's BNL subsidiary. In Germany - where the bank's main focus lies with listed certificates - it issued 32 tranche products; 18,471 flow products, such as capped bonus certificates and discount certificates; and 26,454 leverage certificates during 2Q2016.
Click the link to view the BNP Paribas second quarter 2016 results, the second quarter 2016 presentation and the consolidated financial statements for the first half 2016.
Deutsche Bank reports significant decrease in equity derivatives revenues
Vontobel grows ETP market share, promotes digital expansion and 'white labelling 2.0'