The French bank's global markets segment saw ‘very strong rise’ in revenues while the enhanced cooperation between CIB and wealth management paid off in 2022.
BNP Paribas has reported an increase of 27% year-on-year in revenues which stood at €8.7 billion at the end of 2022, and accounted for 52.6% of the corporate and investment banking (CIB) revenues, according to the bank’s annual results released today (7 February).
Within global markets, fixed income, currencies and commodities (FICC) and equity & prime services saw revenues climbing by 32.6% and 19.3% year-on-year (YoY), respectively.
FICC delivered ‘very good performance in rates, foreign exchange, emerging markets and commodity derivatives’ while the context was less favourable on the primary and credit markets. Equity & prime services saw ‘good level of client activity’, particularly in equity derivatives, and ‘a good level of contribution’ from prime services.
The French bank pointed at the ongoing digitalisation initiative within global markets, which included the consolidation of leadership positions in multi-dealer electronic platforms, and its coming acquisition of Kantox, a platform for automation of currency risk management for corporates.
The revenues growth was also reflected within the other two CIB segments – global banking and securities services, which were up by 2.6% to €5.2 billion and 11% to €2.6 billion year-on-year (YoY), respectively.
Overall, BNPP’s CIB revenues increased by 15.7% to €16.5 billion in 2022 YoY, making up 32.7% of the entire group’s revenues followed by the commercial, personal banking & services (CPBS) division where revenues increased by 9.3% to €18.6 billion YoY ‘driven by the strong increase in net interest income and the rise in fees’.
BNP Paribas’ increased commercial & personal banking revenues were supported by ‘very sustained net inflows in 2022 (> €9.0 billion)’ and strengthened cooperation between CIB and investment & protection services (IPS) covering structured products and responsible savings.
Revenues at IPS rose by 3.% to €6.7 billion on the back of ‘good sales and business drive sustained by net asset inflows in wealth management', which led to a 4.8% increase in pre-tax income reaching €2.6 billion.
Groupwide, revenues were up by nine percent to €50.4 billion in 2022 compared to 2021 while operating expenses also went up by 8.3% to €33.7 billion. As a result, pre-tax income saw a six percent increase amounting to €14.5 billion.
The bank headed by CEO Jean-Laurent Bonnafé (pictured) issued 3,078 non-flow structured products across 17 markets in 2022, according to SRP data.
In France, BNPP marketed 848 structured products led by 449 medium term notes and 395 certificates in 2022, an increase from 667 in 2021. The majority of the products were linked to single index, single share or share baskets - interest rate, credit and commodity and hybrid assets were used in 18, 14, two and one product, respectively. The only product featuring hybrid assets was a five-year credit default, callable and steepener structure tracking the performance of Generali and the 10-year EUR constant maturity swap (CMS) rate.
Commodity-linked products were also scarce with only two products linked to the WTI crude oil price and the Bloomberg Europe Water Index - wrapped as notes, the products have tenors of two and 10 years, respectively.
The French bank also marketed 580 structured products in Italy in 2022, a rise from 389 in the prior-year period - 78 of these products are linked to non-equity assets, mostly credit (64 products), interest rate (nine), commodity (four) and fund (one), an increase from 10 in 2021.
The only fund product issued by BNP Paribas in 2022 tracks the performance of the Theam Quant - Equity Europe Climate Care I MD EUR Fund - the five-year product features a capped call payoff structure. Other underlyings offered by BNP Paribas in Italy in 2022 included WTI crude oil, Brent crude oil, gold, secured overnight financing rate, three-month Euribor and one-year USD constant maturity swap.
The French bank also issued 482 products in Germany and 71 products in Finland in 2022, which translated to a growth from 233 and 52, respectively. Outside Europe, Taiwan saw 805 products issued by the French bank in 2022, almost half of the issuance in 2021.
By asset class, the entire issuance of structured products at BNPP posted a noticeable shift as the number of products tied to non-equity tripled to 295 YoY driven by credit (141 products), interest rate (89), hybrid (39), commodity (10), FX rates (10), fund (five), ETF (one).
Those popular underliers included five-year and 10-year EUR constant maturity swap rate, three-month Euribor and Markit CDX North America High Yield.
Click here to read BNP Paribas’ earnings presentation for FY2022.