reports
- Johann Scholtz
Morningstar | BNP Paribas 1Q 2019: Solid Beat With Investment Banking ...
No-moat BNP Paribas reported attributable net income of EUR 1.9 billion for the first quarter of 2019, 22% higher than the EUR 1.6 billion it reported for the first quarter of 2018. Consensus expectations were for attributable net income of EUR 1.8 billion. The results are somewhat distorted by nonrecurring items; profit before tax, excluding nonrecurring items, came out at EUR 1.9 billion, unchanged compared with the prior year but 14% ahead of consensus. Most striking to us was the good reven...
- Johann Scholtz
BNP Paribas 1Q 2019: Solid Beat With Investment Banking Revenue Defyin...
No-moat BNP Paribas reported attributable net income of EUR 1.9 billion for the first quarter of 2019, 22% higher than the EUR 1.6 billion it reported for the first quarter of 2018. Consensus expectations were for attributable net income of EUR 1.8 billion. The results are somewhat distorted by nonrecurring items; profit before tax, excluding nonrecurring items, came out at EUR 1.9 billion, unchanged compared with the prior year but 14% ahead of consensus. Most striking to us was the good reven...
- Johann Scholtz
Morningstar | BNP Paribas Company Report
BNP Paribas is one of a select few European banks that have remained profitable over the past 15 years, through two major crises. Similar to its European peers, it had to take significant markdowns against the carrying values of its lending book, as well as other financial instruments. However, the diversity of its earnings, combined with a relatively benign outcome in its French home market, meant BNP Paribas had the ability to absorb these losses in its profit and loss statement and still gene...
- Johann Scholtz
BNP Paribas Company Report
No-moat BNP Paribas reported attributable net income of EUR 7.5 billion for the 2018 fiscal year, 3% lower than what it reported for 2017 and in line with consensus and our bottom-line expectations for the quarter. The reported pretax profits of EUR 10.2 billion was, however, below both our estimated pretax profits of EUR 10.9 billion for 2018; consensus expected EUR 10.6 billion. Very weak trading revenue in the final quarter of 2018 was primarily to blame, the sharp sell-off in global markets ...
- Johann Scholtz
Morningstar | BNP Paribas: Even Lowered Guidance Might Be a Stretch
No-moat BNP Paribas reported attributable net income of EUR 7.5 billion for the 2018 fiscal year, 3% lower than what it reported for 2017 and in line with consensus and our bottom-line expectations for the quarter. The reported pretax profits of EUR 10.2 billion was, however, below both our estimated pretax profits of EUR 10.9 billion for 2018; consensus expected EUR 10.6 billion. Very weak trading revenue in the final quarter of 2018 was primarily to blame, the sharp sell-off in global markets ...
- Johann Scholtz
Morningstar | BNP Paribas Even Lowered Guidance Might Be a Stretch. Se...
No-moat BNP Paribas reported attributable net income of EUR 7.5 billion for the 2018 fiscal year, 3% lower than what it reported for 2017 and in line with consensus and our bottom-line expectations for the quarter. The reported pretax profits of EUR 10.2 billion was, however, below both our estimated pretax profits of EUR 10.9 billion for 2018; consensus expected EUR 10.6 billion. Very weak trading revenue in the final quarter of 2018 was primarily to blame, the sharp sell-off in global markets ...
- Johann Scholtz
BNP Paribas: Even Lowered Guidance Might Be a Stretch
No-moat BNP Paribas reported attributable net income of EUR 7.5 billion for the 2018 fiscal year, 3% lower than what it reported for 2017 and in line with consensus and our bottom-line expectations for the quarter. The reported pretax profits of EUR 10.2 billion was, however, below both our estimated pretax profits of EUR 10.9 billion for 2018; consensus expected EUR 10.6 billion. Very weak trading revenue in the final quarter of 2018 was primarily to blame, the sharp sell-off in global markets ...
- Johann Scholtz
Morningstar | Tailwind From Lower Loan Losses Begins to Wane in BNP Pa...
No-moat BNP Paribas reported attributable net income of EUR 2.1 billion for the third quarter, 4% higher than what it reported for the corresponding period in 2017 and in line with consensus expectations for the quarter. The results were saved by a lower tax rate; pretax profits declined 5%, with flat revenue and a 2% increase in expenses. We do not forecast quarterly earnings, but the run rate of earnings growth is in line with our full-year expectations. Our estimated profit before tax for fis...
- Johann Scholtz
Tailwind From Lower Loan Losses Begins to Wane in BNP Paribas' 3Q
No-moat BNP Paribas reported attributable net income of EUR 2.1 billion for the third quarter, 4% higher than what it reported for the corresponding period in 2017 and in line with consensus expectations for the quarter. The results were saved by a lower tax rate; pretax profits declined 5%, with flat revenue and a 2% increase in expenses. We do not forecast quarterly earnings, but the run rate of earnings growth is in line with our full-year expectations. Our estimated profit before tax for fis...
- Johann Scholtz
Morningstar | European Banks: Little Delight From Turkey
Turkey's rapid economic growth was fuelled by a surge in credit, and the recent collapse in the value of the lira threatens to topple this house of cards. Banco Bilbao Vizcaya Argentaria, Unicredit, ING, and BNP Paribas respectively derive 14%, 10%, 5%, and 3% of their profits from Turkey, which is at risk. Our base-case scenario is that the Turkish economy goes through a phase of painful rebalancing during which it weans itself from its reliance on foreign funding. Turkish banks' profitability...
- Johann Scholtz
European Banks: Little Delight From Turkey
Turkey's rapid economic growth was fuelled by a surge in credit, and the recent collapse in the value of the lira threatens to topple this house of cards. Banco Bilbao Vizcaya Argentaria, Unicredit, ING, and BNP Paribas respectively derive 14%, 10%, 5%, and 3% of their profits from Turkey, which is at risk. Our base-case scenario is that the Turkish economy goes through a phase of painful rebalancing during which it weans itself from its reliance on foreign funding. Turkish banks' profitability ...
- Johann Scholtz
Morningstar | BNP Paribas' 2Q Below Our Expectations; Cutting Our Earn...
No-moat BNP Paribas reported attributable net income of EUR 2.4 billion for the second quarter of 2018, in line with what it reported for the second quarter of 2017 and significantly ahead of the EUR 2.1 billion that consensus expected. The result takes BNP up to EUR 4 billion for the first half of 2018. Our previous net income estimate for 2018 of EUR 8.4 billion looks full, and we are paring our estimate for revenue by 2% and increasing our expectation for expense growth by 1%, which leads ...
- Johann Scholtz
Morningstar | BNP Paribas' 2Q Below Our Expectations; Cutting Our Earn...
No-moat BNP Paribas reported attributable net income of EUR 2.4 billion for the second quarter of 2018, in line with what it reported for the second quarter of 2017 and significantly ahead of the EUR 2.1 billion that consensus expected. The result takes BNP up to EUR 4 billion for the first half of 2018. Our previous net income estimate for 2018 of EUR 8.4 billion looks full, and we are paring our estimate for revenue by 2% and increasing our expectation for expense growth by 1%, which leads ...
- Johann Scholtz
BNP Paribas' 2Q Below Our Expectations; Cutting Our Earnings Outlook a...
No-moat BNP Paribas reported attributable net income of EUR 2.4 billion for the second quarter of 2018, in line with what it reported for the second quarter of 2017 and significantly ahead of the EUR 2.1 billion that consensus expected. The result takes BNP up to EUR 4 billion for the first half of 2018. Our previous net income estimate for 2018 of EUR 8.4 billion looks full, and we are paring our estimate for revenue by 2% and increasing our expectation for expense growth by 1%, which leads to...
- Johann Scholtz
Is this as good as it gets for BNP Paribas?
Given the tougher tests this year, and our early read on DFAST results, we were not surprised that several banks ran into issues for the 2018 Comprehensive Capital Analysis and Review, or CCAR, stress test. Of the 35 banks undergoing CCAR, 31 firms received outright nonobjections. Goldman Sachs, Morgan Stanley, and State Street received conditional nonobjections, while DB USA Corporation (one of the foreign banks participating for the first time) received an objection on qualitative grounds. We ...
- Johann Scholtz
Tougher CCAR Test Than Last Year, Overall, No Serious Restrictions For...
Given the tougher tests this year, and our early read on DFAST results, we were not surprised that several banks ran into issues for the 2018 Comprehensive Capital Analysis and Review, or CCAR, stress test. Of the 35 banks undergoing CCAR, 31 firms received outright nonobjections. Goldman Sachs, Morgan Stanley, and State Street received conditional nonobjections, while DB USA Corporation (one of the foreign banks participating for the first time) received an objection on qualitative grounds. We ...
- Johann Scholtz
French Banks: Clear Risks Not Reflected in Valuations
We have recently updated our economic moat ratings and fair value estimates for the French banking sector. We have downgraded our moat ratings for BNP Paribas and Credit Agricole to no-moat, we maintain our no-moat rating for Societe Generale, and we initiate coverage on Natixis with a no-moat rating. We maintain our respective fair value estimates for BNP Paribas and Credit Agricole at EUR 60, or 0.9 times tangible book value, and EUR 11, or 0.8 times tangible book value. We reduce our fair val...
- Johann Scholtz
BNP Paribas: Is it as good as it gets?
Narrow-moat BNP Paribas reported attributable net income of EUR 1.6 billion for the first quarter of 2018, 17% lower than in first-quarter 2017. A 4% drop in revenue and a 2% increase in costs led to preprovision profits declining by 20% year on year. While currency translation did have a negative bearing on the results, the disappointing earnings mainly stemmed from a very weak quarter in the investment bank. As we are reconsidering our fair value estimate and moat rating for BNP Paribas, we ar...
- Johann Scholtz
BNP Paribas 1Q 2018 Results Depressed by Weak Trading Result
Narrow-moat BNP Paribas reported attributable net income of EUR 1.6 billion for the first quarter of 2018, 17% lower than in first-quarter 2017. A 4% drop in revenue and a 2% increase in costs led to preprovision profits declining by 20% year on year. While currency translation did have a negative bearing on the results, the disappointing earnings mainly stemmed from a very weak quarter in the investment bank. As we are reconsidering our fair value estimate and moat rating for BNP Paribas, we ar...
- Johann Scholtz
Growth remains slow in France, but strong inflows point to a turnaroun...
Narrow-moat BNP Paribas reported pretax earnings of EUR 11.3 billion for 2017, just shy of consensus expectations of EUR 11.5 billion, and flat compared with 2016. We retain our EUR 67.50 fair value estimate and our narrow moat rating. Restructuring costs booked at the center increased by 70%, which depressed consolidated results; however, the operating businesses saw pretax earnings grow by 13%, as excellent cost control and lower credit charges negated anaemic top-line growth. We are sceptical...
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