BNP Paribas Group: Results as at 31 March 2008
14.05.2008 | Press release
QUARTERLY NET PROFIT CLOSE TO 2 BILLION EUROS
• REVENUES €7,395MN (-10.0%/1Q07) (+6.9%/4Q07)
• NET INCOME (group share) €1,981MN (-21.0%/1Q07) (X2/4Q07)
• DIRECT IMPACT OF THE CRISIS YET AGAIN LIMITED COMPARED TO THE PEER GROUP: -€546MN compared to -€898MN in 4Q07 (before tax)
A POSITIVE CONTRIBUTION OF ALL THE DIVISIONS
PRE-TAX INCOME OF THE OPERATING DIVISIONS
• FRENCH RETAIL BANKING (FRB)* €481MN (+6.9%/1Q07) (+49.4%/4Q07)
• BNL BANCA COMMERCIALE (BNL bc) €177MN (+22.1%/1Q07) (+52.6%/4Q07)
• INTERNATIONAL RETAIL SERVICES (IRS, formerly IRFS) €659MN (+3.3%/1Q07) (+101.5%/4Q07)
• ASSET MANAGEMENT AND SERVICES (AMS) €430MN (-10.0%/1Q07) (+4.4%/4Q07)
• CORPORATE AND INVESTMENT BANKING (CIB) €318MN ( -72.9%/1Q07) (+3.9%/4Q07)
* excluding PEL/CEL effects
SUPERIOR QUALITY FRANCHISES WHOSE COMPETITIVE POSITIONS ARE FURTHER BOLSTERED
• FRB Very good customer acquisition and continued sustained growth in volumes
• BNL bc 2009 synergy target raised from €480MN TO €550MN
• IRS sustained business growth in all business units
• AMS €5.7BN in net asset inflows in 1Q08
• CIB strong client revenues
On 13 May 2008, in a meeting chaired by Michel Pébereau, the BNP Paribas Board of Directors examined the Group's results for the first quarter of the year.
NET PROFIT (group share) OF CLOSE TO TWO BILLION EUROS
Despite the continued crisis in the financial markets, particularly fierce in March, BNP Paribas Group posted a net profit of 1,981 million euros in the first quarter 2008, down only 21.0% from the record level in the first quarter 2007, achieved in an exceptionally favourable market environment.
This result again reflects the robustness of the Group's growth drive as well as the prudence of its risk policy. The direct impact of the crisis was less this quarter than in the fourth quarter 2007 and remains limited compared to the peer group.
The Group's revenues totalled 7,395 million euros, down only 10% from the record level in the first quarter 2007. Fair value adjustments associated with the financial crisis totalled -360 million euros, a lower amount than the -589 million euros posted in the fourth quarter 2007. These fair value adjustments break down as -514 million euros for the CIB division, -29 million euros for the AMS division and a 183 million euros gain on own debt issued by the Group, credited under the “Corporate Centre”. The operating divisions' revenues held up well at 6,812 million euros, down 10.6% compared to the first quarter 2007 and up 0.5% compared to the fourth quarter 2007.
Given the market environment, the Group curbed the growth of its operating expenses, in particular in those business units hardest hit by the crisis. The Group's operating expenses grew 0.4% compared to the first quarter 2007 and were down 1.7% compared to the fourth quarter 2007. They include 146 million euros in restructuring costs, posted under the “Corporate Centre”, associated with BNL's integration, of which 127 million euros for a new staff departure programme agreed with the unions in the first quarter 2008. As for the operating divisions, operating expenses shrunk 2.8% compared to the first quarter 2007, in particular thanks to adjustments in CIB's accrual for variable compensation. The cost/income ratio was 64%.
Gross operating income totalled 2,790 million euros, down 23.1% compared to the first quarter 2007 but up 24.9% compared to the fourth quarter 2007. It grew in aggregate 9.2% for retail banking divisions compared to the first quarter 2007.
The cost of risk was 546 million euros compared to 260 million euros, a particularly low level, in the first quarter 2007 and 745 million euros in the fourth quarter 2007. The direct impact of the financial crisis on the cost of risk this quarter was 57 million euros for BancWest and 129 million euros for CIB, or a total of 186 million for the Group compared to 309 million in the fourth quarter 2007. The cost of risk also rose in the Personal Finance business unit, rising from 155 million euros in the first quarter 2007 to 230 million in the first quarter 2008, given the strong growth in volumes and a further deterioration of risks in Spain.
After tax and deducting minority interests, the net income group share came to 1,981 million euros, down only 21.0% from the record level in the first quarter 2007, and reflecting annualised return on equity of 18.0%.
A POSITIVE CONTRIBUTION OF ALL THE DIVISIONS
Despite an environment characterised by a worsened financial crisis, especially in March, all the Group's divisions continued their business development and posted a positive contribution to the Group's results. This performance again places BNP Paribas amongst the leading banks that are holding up best in the face of the financial crisis.