New Delhi: Bumper trading volumes have helped many major European banks to produce stronger-than-expected third-quarter earnings and some also now have a more optimistic outlook on loan losses caused by the financial fallout from COVID-19.
The banks’ third-quarter performance will become an important gauge of financial strength ahead of December when the European Central Bank is expected to revisit its recommendation for euro zone banks not to pay dividends.
BNP Paribas said that its capital cushion, its common equity tier one ratio, was up by 20 basis points at 12.6% at end-September, which took into account a 50% dividend pay-out ratio.
Analysts at Jefferies said all the bank’s divisions were either in line or ahead of consensus.
BNP Paribas shares were up by 6.5% at 0849 GMT.
Revenue at BNP Paribas’ corporate and institutional bank rose by 17.4%, while fixed-income trading revenue jumped by 36% “with a good level of client activity on the rate and forex markets.”
Five European investment banks on average produced a 26% increase in fixed-income trading revenue in the quarter, based on Reuters’ calculations.
