BNP Paribas (BNP) Status Update summary

Strategic positioning and growth drivers

• Global Markets has grown from €5bn to €8bn in revenues since 2019, gaining 90bps of market share, driven by organic and inorganic expansion, including the integration of Exane and Deutsche Bank Prime Services.

• The equity business is organized across equity derivatives, Prime Services, and cash equities, each benefiting from scale, technology, and cross-selling opportunities.

• Cross-selling across the top 100 institutional clients has increased, with 52 clients now using all three equity products, supporting further wallet share gains.

• The client base has diversified, with significant growth in asset and wealth managers and alternative investment funds, increasing wallet share by 140bps and 210bps respectively since 2019.

• The business is positioned for continued organic growth, with bolt-on acquisitions considered opportunistically and a focus on leveraging a comprehensive equities platform for further market share gains.

Financial performance and targets

• Revenues in Global Markets grew 18% year-on-year in Q2 2024, with the equity franchise achieving a 57% increase versus Q2 2023.

• Global Markets revenues increased 44% from 2019 to 2023, with a revenue CAGR target above 7.5% from 2021 to 2025, currently on track to deliver.

• The equity business revenue mix is approximately 50% equity derivatives, 40% Prime Services, and 10% cash equities, with the mix evolving as the platform grows.

• Pre-tax income yield for CIB/Global Markets is around 22%, translating to an ROE above 15.5%, with cost-income ratio reduced by over 8 points in the last five years.

• Cost per trade in equity derivatives has dropped by 28% due to digitization and scale, supporting further margin expansion.

Technology, risk management, and resilience

• Heavy investment in technology and digital platforms has enabled scalable growth, operational resilience, and improved client experience, with over 4,000 IT staff dedicated to Global Markets.

• AI initiatives, such as the partnership with Mistral AI, are being integrated to enhance capabilities.

• Prudent risk management has resulted in daily PNL volatility being well contained; only 1% of trading days in 2023 were negative, outperforming global peers.

• The business model is more stable and less volatile due to diversification across products, clients, and increased fee-based and financing activities.

• Average daily P&L increased by 44% from 2019 to 2023, outperforming increases in Value at Risk (VaR).