BNP Paribas Wealth and Asset Management unit has registered a mixed performance in Q4 2020, with an 8% rise in pre-tax income and a 14% decrease in revenues.
The low-interest rate environment at Wealth Management was partly offset by the rise in financial fees, while Real Estate Services revenues were hit by the Covid-19 pandemic. The bright spot was Asset Management, where revenues rose.
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The group performance suffered, with net income of €1.59bn ($1.9bn), down 16% from the previous quarter and 14% from Q4 2019. However, the figure still beat analyst expectations.
Wealth and Asset Management highlights
The unit’s pre-tax income was €233m in the quarter to December 2020, versus 216m in the previous year.
Gross operating income at the division dropped 20% to €157m from €197m over the period. Revenues decreased to €826m from €957m.
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By GlobalDataHowever, the impact of the transformation plan, mainly in Asset Management, along with a significant fall in Real Estate Services costs led to a 12% fall in operating expenses, which were €669m in Q4 2020.
Insurance and Wealth and Asset Management reported by “very good” net asset inflows in 2020, mainly late last year. This was due to strong Asset Management inflows in money-market and medium- and long-term vehicles and Wealth Management inflows in Asia and Europe, mainly Germany.
Total assets under management (AuM) reached €1.16trn at the end of December 2020.
AuM broke down as follows: Asset Management (€512bn, including €29bn from Real Estate Investment Management), Wealth Management (€390bn) and Insurance (€264bn).
Group performance
At a group level, the French bank’s attributable net income was €1.59bn in Q4 2020, compared to €1.85bn a year ago.
The group’s pre-tax income dropped 12% from €2.23bn from €2.53bn.
Revenues fell 5% year-on-year to €10.83bn. The CET 1 ratio, a key measure of strength, was 12.8% at the end of December 2020, up by 70 basis points from the previous year.
The banking group also put aside another €1.4bn in loan loss provisions.
BNP Paribas CEO Jean-Laurent Bonnafé said: “BNP Paribas has been highly resilient, thanks to its diversified and integrated model, its financial solidity, its digital and industrial transformation, and its platforms’ execution capabilities.
“On the strength of these advantages, we are well positioned to enter a new phase in the development of our activities.”
