BNP Paribas Posts Smaller Than Expected Drop in Profit Amid Pandemic
05 Febrero 2021 - 02:26AM
Noticias Dow Jones
By Noemie Bisserbe
PARIS -- French bank BNP Paribas SA reported a drop in
fourth-quarter profit, hurt by record low interest rates and the
fallout of the coronavirus pandemic, but said it expected revenue
to bounce back this year as the global economy gradually
recovers.
France's biggest bank by assets said net profit for the three
months to Dec. 31 fell by 13.9% to EUR1.59 billion euros,
equivalent to $1.9 billion, and revenue declined by 4.5% to
EUR10.83 billion, dented by a weak insurance and consumer credit
business.
Still, the bank's earnings and outlook were slightly above
expectations, underscoring the resilience of BNP Paribas's
diversified business model, analysts said.
The Paris-based lender said it expected revenue to increase next
year as its cost of risk, which reflects provisions for bad loans,
declined.
France's economy has been badly bruised by two national
lockdowns to contain the spread of the coronavirus, which has
killed over 37,000 people in the country and infected millions. The
government's massive subsidy program, rolled out last spring to
prevent widespread unemployment, has helped cushion the economic
blow.
Like other European and U.S. banks, BNP Paribas has also
benefited from a trading boom amid market volatility during the
pandemic.
In the fourth quarter, revenue from fixed-income trading rose
about 22% to EUR1 billion, pushing BNP Paribas's corporate and
investment bank total revenue 6.9% higher to EUR3.32 billion. The
bank said fixed-income trading revenue last year was boosted by
"exceptionally intense" client activity, which was unlikely to
continue.
The bank's domestic-markets division, which includes retail
operations in Italy, France and Belgium, posted a 1.3% decline in
revenue to EUR3.84 billion, impacted by low interest rates.
BNP Paribas said it would pay a dividend of EUR1.11 per share in
cash in May, based on a 21% payout ratio, within limits set by the
European Central Bank for lenders to preserve capital amid the
economic and health crisis. It plans to pay out more in the fourth
quarter when the ECB allows it to reach its target of 50% payout
ratio.
BNP's core Tier 1 capital ratio, which measures a bank's top
quality capital such as equity and retained earnings against
risk-weighted assets, stood at 12.8% in December. This was up from
12.6% in September and well above the 9.31% threshold set by the
ECB.
Write to Noemie Bisserbe at noemie.bisserbe@wsj.com
(END) Dow Jones Newswires
February 05, 2021 03:11 ET (08:11 GMT)
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