BNP Paribas cuts key target for 2020 even as profit surges
Biggest French bank benefits from ‘sharp rebound’ in equities and fixed-income growth
BNP Paribas reported a surge in fourth-quarter net profit, as France’s biggest bank recovered from a blow caused by market disturbances a year earlier, but cut a key profitability target for 2020.
Fourth-quarter revenue jumped 11.5 per cent compared with the same period in 2018 to €11.3bn, while net income rose 28.2 per cent to €1.85bn in the three months to the end of December.
The lender’s investment and corporate banking division’s revenues increased 30 per cent compared with the same period a year earlier, buoyed by a “very sharp rebound” in equities trading and strong growth in its fixed income, currencies and commodities trading unit.
However, BNP said it expects a return on tangible equity of 10 per cent this year, down from previous expectations of 10.5 per cent.
Chief executive Jean-Laurent Bonnafé said the results confirmed “the strength of its diversified and integrated model”.
“BNP Paribas achieved a very good performance in 2019 thanks to its good business drive and the effects of its transformation.”
The results come a year after BNP suffered what it called “extreme market conditions” that hit trading revenues and its ambitions to become the European investment banking champion.
In response, France’s biggest bank by market capitalisation accelerated cost-cutting, shut its controversial proprietary trading unit and slashed its financial targets.
BNP said on Wednesday that its corporate and investment banking ranked number 3 in Europe, Middle East and Africa in the first nine months of 2019, making it the leading European player behind two US institutions.
Its common equity tier one ratio, a measure of balance sheet strength, was 12.1 per cent at the end of December, an increase of 10 basis points over the previous quarter.