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November 3, 2020

BNP Paribas wealth unit continues downward trajectory amid Covid-19 headwinds

BNP Paribas Wealth and Asset Management arm has reported a fall in its Q3 2020 pre-tax profit, amid a challenging market. The group performance too suffered but surpassed analyst expectations, driven by trading boom.

Key Wealth and Asset Management metrics

The division’s pre-tax income was €146m ($170.8m) for the three-month-period ending September 2020, a fall of 14% compared to €170m in the same quarter of 2019.

Gross operating income decreased to €136m from €154m.

The impact of a low-interest-rate environment on Wealth Management coupled with the pandemic’s impact on Real Estate Services led to a 9% year-on-year decrease in the unit’s revenues to €734m.

Operating expenses dropped 8% to €598m, driven by a fall in Real Estate Services costs and transformation measures mainly in Asset Management.

Total assets under management (AuM) reached €1.11trn at the end of September 2020.

The figure marks a 1% fall from the December-end 2019, driven by a strong fall in the financial markets in Q1 2020, offset by a rebound in Q2 and Q3.

AuM broke down as follows: Asset Management (€474bn, including €29bn from Real Estate Investment Management), Wealth Management (€380bn) and Insurance (€256bn).

Net inflows reached €30.4bn in the year-to-date. The firm attributed the performance to Asset Management’s “very strong” inflows in money-market as well as medium and long-term vehicles and good Wealth Management inflows in Europe and Asia.

Group highlights

At a group level, the French bank’s attributable net income for the three months to September 2020 was €1.89bn, down 2% from €1.94bn.

The group’s pre-tax income dipped 5% €2.67bn from €2.8bn over the period. Revenues remained almost stable at €10.88bn.

The performance was supported by the Corporate and Institutional Banking unit, which registered a 17% year-on-year growth in revenue. Fixed-income trading revenue surged 36%.

BNP Paribas CEO Jean-Laurent Bonnafé said: “In an economic context featuring different dynamics across regions and sectors, BNP Paribas demonstrates its high resilience thanks to its financial solidity, its diversification, and the power of execution of its platforms.”

 

 

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