French bank BNP Paribas's
BNP Paribas's CIB revenues totaled 3.351 billion euros ($4.82 billion) for the quarter, up 81 percent from the second quarter of 2008, and following record revenues of 3.696 billion euros in the first quarter of 2009.
Once again, fixed income revenues were exceptional, said David Thebault, head of quantitative sales trading, at Global Equities, in Paris.
They managed to capture a big chunk of the boom in the corporate bond market that saw a lot of companies coming to this market to refinance their debt, while on the other side, investors rushed to the asset class, he said.
The fixed income business unit, already behind the bank's robust results in the first quarter, reported revenues of 1.931 billion euros for the second quarter, as strong investor appetite for the asset class continued, and as credit spreads tightened while bid/offer spreads remained wide.
The question is: when the bond market boom abates around the fourth quarter or next year's first quarter, will BNP be able to prevent its CIB revenues from falling? Thebault said.
Revenues from the equity and advisory business, which were barely positive in the first quarter of the year, were back to normal in the second quarter, totaling 710 million euros, driven by demand from institutional investors and a pick-up in hedge fund activity.
The bank also benefited from the buoyant equity origination market, where BNP Paribas won bookrunner mandates for a number of issues.
Revenues from the financing businesses unit, which totaled 710 million euros, were stable compared to the second quarter 2008, the bank said, citing strict credit selection policy and better client and country risk profile.
The cost of risk surged to 744 million euros, up 658 million euros compared to the second quarter 2008.
BNP said the cost of risk in capital markets was significantly below the levels it had reached at the peak of the financial crisis in 2008, while the cost of risk in the financing businesses unit, affected by the slowdown in the economy, was 447 million euros, hit by provisions of 109 million euros related to LBOs and 103 million euros related to the Gulf countries.
Overall, the CIB's pretax income totaled 1.145 billion euros compared to 523 million euros in the second quarter 2008 and 1.229 billion euros in the first quarter 2009.
On Monday, UK-listed peers HSBC
(Reporting by Blaise Robinson; Editing by Mike Nesbit)