On Thursday 30 July 2020, the Board of Directors of BNP Paribas examined the Group’s results for the second quarter of 2020 and endorsed the interim financial statements for the first half of the year.
At €11.675 million, overall revenues for BNP Paribas were up 4.0% compared to the second quarter of 2019, particularly due to growth in Corporate Banking, Global Markets, and Domestic Markets and International Financial Services retail networks.
Retail banking & services: Domestic Markets
Domestic market revenues, which include Private Banking in France (excluding PEL/CEL effects), Italy, Belgium and Luxembourg, in the retail banking and services division, fell 5.2% (compared to the second quarter of 2019) to €3.721 million. This decrease reflected the impact of the low-interest-rate environment and the health crisis, particularly on the level of fees, which were only partially offset by the increased loan volumes and the strong activity of specialised businesses.
At €2.446 million, operating expenses were also down 2.8%, with a more pronounced decline in the networks (down 3.6%) and a slight increase in specialised businesses (up 1.0%). Gross operating income fell 9.4% to €1.276 million.
The cost of risk came to €331 million (up from €214 million in the second quarter of 2019). This reflected in particular the impact of the ex-ante provisioning of expected losses amounting to €67 million.
Other Domestic Markets business units
Domestic Markets’ specialised businesses all showed a very good business drive and confirmed the rapid recovery of activity after a low point in April. Arval’s financed fleet grew strongly by 7.2% compared to the second quarter of 2019, and by 2.5% on the year to date, driven by a rebound in vehicle orders in June and support provided to customers, particularly in contract extensions.
Leasing Solutions' financing outstandings were also up 1.1%1 compared to the second quarter 2019. In June, Leasing Solutions recorded a strong rebound in demand for logistical and IT equipment financing, up 40.7% compared to May 2020.
Luxembourg Retail Banking (LRB)'s outstanding loans rose by 10.4% compared to the second quarter 2019, with good growth in mortgage and corporate loans. Deposits were down by 2.9%. LRB is seeing a gradual return to normal business, with a significant recovery of credit card transactions and loan applications since April.
At €829 million, revenues of the five businesses were up by 8.2% compared to the second quarter of 2019, whilst operating expenses rose by 1.0% to €451 million as a result of the effect of business development, contained by cost-saving measures. The jaws effect was positive by 7.2 points and the cost of risk totalled €40 million (compared to €27 million in the second quarter of 2019).
Thus, the pre-tax income of these five businesses, after allocating one-third of Luxembourg Private Banking’s net income to the Wealth Management business (International Financial Services division), was up sharply by 15.8% compared to the second quarter of 2019, to €335 million.
For the first half of the year, the revenues of the five businesses, at €1.675 million, were up on the whole by 8.6% compared to the first half of 2019, with a very good level of activity in all the business lines. Operating expenses rose by 3.2% to €959 million, due to business development but remained contained by cost-saving measures. The jaws effect was positive by 5.4 points. The cost of risk totalled €78 million (compared to €63 million in the first half of 2019). Thus, the pre-tax income of these five businesses, after allocating one-third of Luxembourg Private Banking’s net income to the Wealth Management business (International Financial Services division), rose sharply by 15.8% to €627 million over one year.
