Sunday , November 19 2017

French banks’ trading results return to earth

epa05301315 (FILE) A file photo dated 14 September 2011 showing a general view of a branch of French bank Credit Agricole, Paris, France. Crédit Agricole on 12 May 2016 said Crédit Agricole Group's net income Group share was 818 million euros in the 1st quarter of 2016, compared with 1,228 million euros in the first quarter of 2015.  EPA/IAN LANGSDON

Bloomberg

After outshining some of Wall Street’s biggest and best this year, trading results at France’s largest banks are crashing back to earth.
Leading the declines were Credit Agricole SA and Societe Generale SA, which both posted a revenue slump of about 25 percent, while BNP Paribas SA’s earnings from all trading activities—including bonds, equities and currencies—fell 15 percent. Only Natixis posted better results than Wall Street peers, registering a 9 percent fall compared with the US average of 15 percent.
After emerging relatively unscathed from the financial crisis, some French banks have taken advantage of the pullback from some businesses of European rivals such as Deutsche Bank AG to expand in investment-banking. While their focus on exotic products and equity derivatives paid off with stellar results earlier this year, they were unable to escape the deadening effect of low volatility and muted demand that’s characterised recent trading conditions.
“It’s a return to reality,” said Karim Bertoni, who helps manage about $10 billion at Bellevue Asset Management AG in Switzerland. “There is some disappointment.”
At SocGen, a global leader in equity derivatives that plans to announce new targets later this month, total trading sales fell by about a quarter. At BNP Paribas, long a leader in equity derivatives and structured products, the drop in trading revenue was on a par with that of the Wall Street banks on a constant currencies basis. The bank had outperformed in the second quarter, restricting declines at the global markets division to 2.3 percent, compared with a 10 percent drop on Wall Street. Revenue at Credit Agricole rose 10 percent in the second quarter. Natixis reported the smallest trading decline of the French banks in the third quarter. BNP Paribas, France’s biggest bank, managed to post an increase in sales from equities and prime services for hedge funds, but couldn’t escape a 26 percent bond-trading slump.

About Admin

Check Also

epa03751580 Traders work on the floor of the New York Stock Exchange at the start of the trading day in New York, New York, USA, 19 June 2013. Inflation remained minimal last month in the United States, leaving the rate-setting Federal Reserve flexibility when it issues monetary policy decisions 19 June in Washington.
Consumer prices rose a seasonally adjusted 0.1 per cent in May, following declines of 0.4 per cent in April and 0.2 per cent in March. Uncertainty about the Fed's plans has left world bond and equities markets yo-yoing in recent weeks. The Fed is scheduled to end its two-day regular meeting with a monetary policy statement at 2 pm (1800 GMT) Wednesday, followed by a closely watched press conference by bank chief Ben Bernanke.  EPA/JUSTIN LANE

Bond traders brace for inflation data that could rattle the Fed

Bloomberg In the eyes of Morgan Stanley, bond traders would be wise to remember November ...

Leave a Reply

Your email address will not be published. Required fields are marked *