Are the wheels coming off BNP Paribas’ grand plan?
Its 2018 results look bad, but the bank insists it is still on track for success.
BNP Paribas bowed to the inevitable on February 6 and revised the targets it had set for corporate and institutional banking (CIB) revenue growth and cost savings in its 2017 to 2020 strategic plan. The move came after a year of decidedly mixed results that saw it underperform peers heavily in equities and fixed income sales and trading.
The bank still trumpets its leading position in euro debt capital markets, but the reality is that some of the areas where BNPP continues to rank highest are the ones that are going badly for everyone. After all, total DCM revenues are down 11% year on year at those banks that report it explicitly (BNPP does not).
At the same time, BNPP is showing small but nonetheless worrying signs of slip-ups in sophisticated businesses where it has traditionally been dominant, like equity derivatives, while it is also underperforming peers in big areas like fixed income, currencies and commodities (FICC).
It is no surprise that FICC was a tough year at BNPP – it was for almost everyone – but the bank did worse than those that have reported so far.