PARIS (Reuters) – COVID-19 pandemic-related costs ate into the net profit of BNP Paribas in the fourth quarter as the lender issued more provisions for potentially bitter loans.
Competitors such as Santander have also been putting money aside as the COVID-19 is hurting economies around the world and hurting lenders forced for loan repayment problems , although the crisis has also brought some trade benefits.
BNP Paribas, the eurozone’s largest registered lender, hit a more interesting note for 2021, saying it expected its risk cost, which reflects provisions for bad loans, to fall compared to 2020 as the scene improves in the second half.
Its cost of risk rose 65.5% to 1.59 billion euros in October to December compared with a year earlier.
Net revenue fell 13.9% to 1.59 billion euros – although this was higher than the average profit forecast by an opinion poll of four analysts – while revenue fell 4.5% to 10.83 billion euros , roughly in line with expectations.
The lender also expects costs to be flat this year and income to increase slightly.
Revenue at its corporate and institutional banking business rose 6.9% in the quarter as fixed-income, cash and commodity-based revenues jumped 22%, reflecting gains at some of contemporaries including the United States.
Last month, Wall Street investment banks reported strong results, helped by a trade surge amid market volatility linked to the COVID-19 pandemic, although lenders targeting consumers who open to economic hurdles, including Bank of America, a major impact on their business.
BNP Paribas said it planned to pay a contribution of 1.11 euros per share in May, based on a 21% pay ratio – within limits set by the European Central Bank for retaining capital lenders Among the crisis.
He is considering paying more in the fourth quarter, he said, which would see him reach his 50% payout target.
($ 1 = 0.8358 euros)
Reciting with Matthieu Protard and Marc Angrand; Edited by Sarah White