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Retail rebound spurs profit rise at France’s BNP as charges drop

Stock Markets45 minutes ago (Jul 30, 2021 01:25AM ET)

(C) Reuters. FILE PHOTO: A BNP Paribas logo is seen outside a bank office in Paris, France, August 6, 2018. REUTERS/Regis Duvignau

PARIS (Reuters) – France’s BNP Paribas (OTC:BNPQY) on Friday reported a 26.6% rise in net income in the second quarter, spurred by a rebound of French retail banking activity and as charges for bad loans dropped back to pre-pandemic levels.

The euro zone’s biggest listed lender said net income profit stood at 2.91 billion euros with its cost of risk, reflecting provisions for bad loans, down by 43.8% at 813 million euros in the quarter.

Revenue was up 0.9%, as a 9.5% rebound in retail banking offset a drop in corporate and investment banking revenue compared to a year ago when like peers the French group profited during a highly volatile period for markets.

“Deposits rose by 7.5% compared to the second quarter 2020, driven by the effects of the public health crisis on customer behaviour”, BNP Paribas said in a statement, adding loans were up by 4%.

The lender also said that the pandemic-related lockdowns and curfews has accelerated the shift to online banking, with a 25.1% increase in daily connections to the mobile apps compared to the second quarter of last year.

In its trading activity, revenue in equity was 2.6 times higher compared to the second quarter of 2020 – but earnings in fixed income, currencies and commodities were down 43%.

Major U.S. banks all saw trading volumes slide in the second quarter compared to a blockbuster year-ago period when the pandemic sparked major volatility in markets, particularly fixed income.

A record first half for dealmaking globally helped cushion the blow for some with the likes of Goldman Sachs (NYSE:GS) seeing a jump in fees from advising on stock market listings and acquisitions. At BNP Paribas, corporate banking revenue was down 1.6% year-on-year in the period.

BNP Paribas said it will pay shareholders an additional dividend of 1.55 euro per share this year as the European Central Bank said last week it would lift restrictions on bank dividend payments and share buybacks beyond September, clawing back a crisis measure that forced banks to retain capital during the pandemic.

Shares in BNP Paribas have gained 20.80% so far this year, underperforming a nearly 24% rise for the Stoxx Europe 600 Banks Index.

Retail rebound spurs profit rise at France’s BNP as charges drop

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