BNP Paribas has presented its second-quarter financial statements, revealing an increase in earnings, thanks in part to a fall in the cost of risk. Over two years, revenues have risen, and in the second quarter of 2021, the euro zone's leading bank posted net income, group share, up 26.6% year-on-year.
Significant revenue growth over 2 years
In the second quarter of 2021, BNP Paribas posted net income, group share, of 2.911 billion euros, up 26.6% year-on-year. In the first half of the year alone, the eurozone's number-one bank posted net income of 4.67 billion euros, which, if it stays on course, should enable it to exceed the results of its previous two financial years.
These improved results are due in part to the fall in the cost of risk: it fell by 634 million euros year-on-year, or 43.8%, to 813 million euros in the second quarter of 2021, compared with 1.4 billion euros in the second quarter of 2020.
However, despite the boost provided by the fall in the cost of risk, BNP Paribas owes the rise in its 2nd quarter net income mainly to the significant increase in its revenues over the last two years. They rose by 552 million euros, or 4.9%, for net banking income of 11.7 billion euros.
Between the second quarter of 2019 and the second quarter of 2021, BNB Paribas' net income, group share increased by 17.9%, unrelated to the fall in the cost of risk.
The Domestic Markets division benefited from demand for credit
BNP Paribas is organized into 3 divisions: Domestic Markets, International Financial Services and Corporate & Institutional Banking (CIB).
Each of these divisions contributed to the rise in net banking income at different times, depending on the economic climate. In the second quarter, it was the Domestic Markets division that had the wind in its sails, benefiting from strong credit demand and higher commission income.
In contrast, despite earnings of 1.63 billion euros, which soared by +54% compared with the second quarter of 2019, and by +3.2% compared with the second quarter of 2020, the corporate and investment bank recorded a decline in its market activities.
The International Financial Services division's revenues were down 2%, but its pre-tax results were up 20% year-on-year.
BNP Paribas has also announced its intention to pay its shareholders a new dividend of €1.55 per share, payable in cash. The decision will be taken at the Annual General Meeting.