BNP Paribas beats expectations, publicizes dividend payout in Could

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Individuals stroll previous BNP Paribas, a french worldwide banking group.

ANGELA WEISS | AFP | Getty Photos

LONDON — BNP Paribas beat analyst expectations when it reported earnings Friday, as its CFO spoke of a “gradual pickup” for the financial system trying forward.

The French financial institution reported internet revenue of 1.59 billion euros ($ 1.90 billion) for the fourth quarter of 2020, beating analyst expectations of 1.2 billion euros, in keeping with Refinitiv. It marked a 15.9% drop in revenue from the earlier three-month interval.

Annual revenue reached 7 billion euros, down 13.5% from December 2019. Analysts polled by Refinitiv had forecast internet revenue for 2020 of 6.5 billion euros.

The French lender additionally stated its price of danger had elevated on account of the Covid pandemic, and put aside an additional 1.4 billion euros in mortgage loss provisions.

“The revenues are secure in comparison with the 12 months earlier than at 44 billion (euros), the prices are down by 1.1 billion (euros). So the gross working revenue, the distinction between the 2, is up in a really materials means,” Lars Machenil, CFO of BNP Paribas, advised CNBC’s Charlotte Reed after the outcomes have been printed.

Listed below are different highlights:

  • Revenues got here in at 10.8 billion euros for the fourth quarter, a drop of 4.5% from a 12 months in the past.
  • For the fiscal 12 months, revenues stood at 44.2 billion euros, marginally decrease than in 2019.
  • Gross working revenue rose by 6.2% from the earlier 12 months.
  • CET 1 ratio — a measure of financial institution solvency — stood at 12.8%, up by 70 foundation factors from a 12 months in the past.

The CIB (Company and Institutional Banking) division noticed a 1.7% drop in revenues from the earlier quarter, whereas home markets delivered a 2.8% improve in revenues over the identical interval.

Dividends in Could

Regardless of euro zone banks having restrictions on dividends given the extreme financial disaster within the area, BNP Paribas pays out a dividend of 1.11 euros per share in Could, equal to 21% of its 2020 internet revenue.

The French lender additionally stated that 29% if its 2020 internet revenue can be invested in share buybacks as soon as the European Central Bank repeals its current recommendation on dividends and share buybacks.

Machenil stated the financial institution is nonetheless following the ECB’s advice by asserting a dividend inside sure parameters suggested by the central financial institution.

Going ahead the financial institution stated the goal was to distribute 50% of its 2021 internet revenue as effectively.

“Once we have a look at the 12 months 2021 what we’ve got assumed is that there will probably be a gradual pickup,” Machenil stated concerning the financial atmosphere this 12 months.

“So earlier than the summer time, there can nonetheless be a little bit of ups and downs,” he stated, including that he expects the Covid-19 vaccine rollout will result in an financial enchancment within the second half of 2021.

The financial institution’s inventory is down nearly 3% for the reason that begin of the 12 months.