European banks under pressure

05 / 05 / 2020
Trading is risky and your entire investment may be at risk

Following the release of its financial results, BNP Paribas’s profit fell by a third in the first quarter (down to € 1.28 billion, while revenue fell 2.3% to € 10.9 billion) as the coronavirus crisis hit stock trading and forced the biggest the Bank in the euro area to allocate more than half a billion euros to lending.

In a statement, CEO Jean-Laurent Bonnafe “Good resilience of returns and results despite this shock demonstrates the robustness of the group’s diversified and integrated model.” He added: “Extreme and extreme volatility has led to distortions in hedging, mainly due to European authorities’ dividends in 2019. ”

Decisions to limit dividends had a one-off negative impact on share trading income of EUR 184 million. The bank also stated that it would accelerate the reduction of operating costs and warned that its net profit by 2020 could be about 15% to 20% lower than in 2019. It stated that earnings from trading in shares were European markets at the end of March “and a year ago reached sales of -87 million euros compared to 488 million euros.

BNP’s trading results did not outperform European rivals such as Barclays and UBS, which had twice the buffer for trading.

Disclaimer: The content of the Reports constitutes Marketing Communication and does not constitute Investment Advice or Investment Research or an offer for any transactions in financial instrument. The content of the Reports represents the view of our experts on a generic basis, and does not take into consideration individual readers personal circumstances, investment experience or current financial situation. In addition, the Reports have not been prepared in accordance with legal requirements designed to promote the independence of Investment Research, and are not subject to any prohibition on dealing ahead of the dissemination of Investment Research. Readers using the Reports should consider the possibility of encountering substantial losses. The past performance is not a guarantee of future results. Therefore, Goldenburg Group Limited shall not accept any responsibility for any losses of traders due to the use and the content of its Reports.