French Banks Report Strong Q2 2022 Despite Provisions Related to Uncertain Macroeconomic Outlook
DBRS Morningstar has released a commentary discussing large French banks’ Q2 2022 earnings, covering BNP Paribas SA, Société Générale S.A., Crédit Agricole Group and Groupe BPCE.Summary highlights from the commentary include:
• French banks delivered another solid performance in Q2 2022 with strong revenue growth, especially in CIB.
• Operating expenses continued to grow to accompany higher activity levels but still with positive jaws.
• Cost of risk was up on ex-ante provisions in view of the uncertain macroeconomic outlook, but remained at low levels.
“Large French banks reported higher net profits, when excluding the one-off impact from the disposal of SocGen’s Russian operations”, said Arnaud Journois, Vice President from the DBRS Morningstar Global Financial Institutions team. “Results were driven by strong revenue growth in almost all business lines, notably in CIB. However, they reported higher loan loss provisions in view of the uncertainty regarding the macroeconomic environment. Nevertheless, cost of risk remains at low levels and we continue to consider French banks as having the ability to weather the current challenging environment, thanks to their high degree of business diversification.”
BNP Paribas is engaged in the provision of banking and financial services. Co.'s business activities are divided into two segments: Retail Banking & Services and Corporate and Investment Banking. The Retail Banking and Services business includes domestic markets and international financial services. The Corporate and Institutional Banking comprises of corporate banking, global markets, and securities services. Other activities include principal investments, which related to Co.'s central treasury function, some costs related to crossbusiness projects, the residential mortgage lending business of personal finance, and certain investments.
Credit Agricole is active in the market of retail banking and related businesses. Co. provides day-to-day banking, savings products, mortgage and consumer loans, insurance, private banking, asset management, lease finance and factoring, corporate and investment banking. Its activities can be divided into six business lines: French Retail Banking - Regional Banks; French Retail Banking - LCL; International Retail Banking; Specialized Financial Services; Savings Management and Insurance; and Corporate and Investment Banking. Co.'s customers are personal customers, farmers, small businesses, companies and local authorities. As of Dec 31 2013 Co.'s total assets amounted to Euro1,536,873,000,000.
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