The French bank’s revenues totalled €42.5 billion in 2018, a 1.5% fall from the previous year, with a good performance in structured products and increased client activity in equity derivatives

BNP Paribas has reported full-year 2018 revenues for its corporate and institutional banking (CIB) division of €10.8 billion, down 7.5% compared to 2017. The bank cited ‘an unfavourable market environment’ as the reason behind the decrease.

BNP Paribas sold more than 200,000 structured products worth an estimated US$7 billion globally in 2018 (FY 2017: US$5.3 billion from 220,405 products), making the bank the second most active public offering provider by issuance, behind Vontobel (220,000 products), according to SRP data.

The vast majority of the bank’s products were listed certificates such as turbos, bonus and capped bonus certificates, which were targeted at investors in Germany and available for trading at the exchanges of Frankfurt and Stuttgart.

Seven hundred and forty-six core products were sold across 19 different jurisdictions, including its domestic France where US$2.1 billion was collected from the sale of 202 structures, which were distributed, among others, via Equitim, i-Kapital, Kepler Cheuvreux, Privalto, and Vital Epargne.

In Belgium, the bank issued 36 structured products worth approximately US$260m, which were available via the distribution networks of BNPP Fortis (15 products), BPost Bank (13), Crelan (two) and Deutsche Bank (six).

Elsewhere in Europe, BNPP was active in the Netherlands and Sweden, with 77 and 32 products respectively, as well as in the Czech Republic (four), Finland (11), Hungary (two), Ireland (seven ) and Poland (four).

Outside Europe, BNP Paribas was active in Brazil where it sold US$302m from 77 products; Japan (US$530m from 50 products); Taiwan (US$428m from 117 products), and the USA (US$33m from 14 products). In South Africa, the bank was the hedging party behind 13 products (US$22m) linked to the proprietary Multi-Asset Diversified Vol 8 EUR Future Index, sold by Momentum.

Revenues in the global markets division (€4.7 billion), were down by 15.4% compared to 2017 given the lacklustre context for fixed income, currencies and commodities (FICC) in Europe and particularly challenging conditions for equity and prime services at the end of the year, according to the bank.

FICC’s revenues were down 21.2% compared to last year despite delivering good performances on the primary market and on structured products. However, client business in rates and credit was weak in Europe due to monetary policy which resulted in low volatility and very low interest rates while the business also reported poor performance in forex, in particular in emerging markets.

Despite increased client activity in equity derivatives and prime brokerage, revenues in the equity and prime services business, at €2 billion, were down 6%. In particular, the impact of extreme market movements at the end of the year on inventory valuations and a loss on index derivative hedging in the US were factors that impacted this performance.

The group’s 2018 wholesale medium/long term funding programme was completed at favourable conditions with €34.3 billion issued including structured products worth €17.1 billion (2.5-year average maturity), almost 50% of the overall issuance (49.85%). The funding target for 2019 is €36 billion (subject to market conditions) and includes €15 billion in structured notes.

 ‘The group is committed to its 2020 ambition and implements further savings to significantly improve operating efficiency in all the operating divisions as early as 2019,’ said Jean-Laurent Bonnafé (pictured), BNPP’s chief executive officer.

Click the link to read the BNP Paribas full year 2019 results and the presentation.