BNL, half a billion in profits: more deposits, less lending

The Italian bank BNL is increasing profits and holding up its parent BNP Paribas, the French giant that took control of the institution years ago. On the whole of BNL's 2023 financial year, reads the French group's consolidated financial statements, which closed with€11 billion in profits, deposits are up 0.3% compared to 2022, with lending holding up well (+3.7% compared to Q3 2023) and margins improving steadily, especially at the end of the year.

Full-year loans are down 4.4% compared to 2022 and 3.0% net of impaired loans. Loans to individual customers held up well and lending to the corporate segment was down. Margin management is disciplined in a competitive environment. Indirect deposits are down 7.7% compared to 31 December 2022. Net inflows in Private Banking are excellent (2.8 billion). Net banking income rose 3.5% to EUR 2,727 million. The interest margin was up 6.6%, accelerating in Q4 2023, driven by margins on deposits, partially offset by the effect of falling volumes and higher funding costs on loans. Fees declined moderately (-0.6%), reflecting good resilience in banking fees, despite the decline in financial fees.

At €1.8 billion, operating expenses were up 4%, mainly due to inflation. Gross operating income increased by 2.7% to €923m. At EUR 410 million, the cost of risk is improving by EUR 55 million, thanks to constant optimisation, and stands at 53 basis points in relation to loans to customers.

As a result, after allocating one third of the Private Banking results to the Wealth Management business line (IPS division), Bnl generated a pre-tax profit2 of 488 million, a considerable increase (+18.8%).