BNP Paribas warns on coronavirus hit to 2020 profit
BNP Paribas warned this morning that its full-year earnings will be impacted by the “major repercussions” caused by the coronavirus crisis, as profit plunged in the first quarter of the year.
The French banking giant said net income for 2020 could be about 15 per cent to 20 per cent lower than last year.
Net income in the first quarter suffered a 33.2 per cent dive to €1.28bn.
The company forecast that there will be a “very gradual recovery” after the end of lockdown measures, and a return to normal health conditions should not be expected before the end of the year.
It said it does not expect Gross Domestic Product to return to 2019 levels before 2022.
“The health crisis has had major repercussions on macroeconomic outlook and produced extreme shocks on the financial markets,” BNP Paribas said this morning.
Revenue slumped 2.3 per cent to €10.88bn in the first quarter of the year compared to
2019.
Meanwhile operating income was down 32.2 per cent at €1.3bn. BNP Paribas said it took a €502m hit on the cost of risk and two one-off revenue hits totalling €568m in the first quarter of the year.
The bank said loans and repurchase agreements almost doubled during the quarter, with its balance sheet jumping from €2.2 trillion to €2.7 trillion.
Chief executive Jean-Laurent Bonnafe said “In response to the health crisis, the group’s teams have mobilised around the world to contribute to the functioning of the economy and its financing.”
He added: “At the end of a quarter supported by an excellent business drive, in line with its 2020 objectives, the results of BNP Paribas for the first quarter 2020 were impacted by the harshness of the health crisis.
“The good resilience of revenues and results despite this shock demonstrates the robustness of the group’s diversified and integrated mode.”