BNP Paribas CFO: Two elements to AXA IM deal explain capital hit
"The AXA deal that we have signed consists actually of two different items," Lars Machenil told analysts on a call.
"On one hand, it consists of a long-term contract with AXA, and on the other hand, the acquisition of AXA IM (Investment Managers). And they require a different handling," he added.
BNP last week hiked its forecast for the capital burden it expected from the acquisition of AXA IM by 10 basis points to 35 basis points on its CET1 ratio - a key measure of financial strength - following updated guidance from the ECB.
BNP is acquiring AXA IM via its insurance subsidiary, Cardif. Many investors had expected BNP would be able to apply the so-called Danish Compromise to the deal, a regulatory approach that reduces the capital for banks that own insurers.
"We considered the deal to be insurance," Machenil said.
The bank's updated guidance on the capital impact reflects this dual view of the transaction, the CFO said.
"It's two different deals and if you look at it, that's how we come to a step-up of 10 basis points."
($1 = 0.8800 euros)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
3 days ago
- Reuters
Poland's BNP Paribas BP beats profit expectations in Q2
GDANSK, Aug 12 (Reuters) - The Polish unit of BNP Paribas ( opens new tab reported a second-quarter net profit of 733.8 million zlotys ($200.4 million) on Tuesday, beating a company-provided consensus of 642 million zlotys, mirroring an upbeat release from its French parent in July. The result was driven by a rise in net interest income and lower administrative costs, which helped offset an increase in credit loss provisions and higher legal costs related to its Swiss franc loan portfolio. More than 81% of BNP Paribas Bank Polska's ( opens new tab shares are owned by the French financial group. The largest bank in the euro zone by assets last month forecast a strong rebound in its retail banking division for the second half of 2025, soothing investor concerns with tight cost control and a smaller-than-expected drop in quarterly profit. Like other Polish lenders, BNP Paribas Polska continues to face legal costs related to its portfolio of legacy mortgage loans denominated in Swiss francs, which were taken out before a surge in the franc's value inflated repayments. The Polish bank's net interest income was 1.47 billion zlotys in the second quarter, against a market forecast of 1.49 billion zlotys. Net fee and commission income was 328.1 million zlotys, compared to the 319 million zlotys expected by analysts. Allowances for expected credit losses stood at 18.2 million zlotys in the same period. It booked 249.4 million zlotys in provisions to cover the risk on Swiss franc loans, compared to a 189.8 million last year. ($1 = 3.6613 zlotys)
Reuters
06-08-2025
- Reuters
Shanghai stocks close at highest since late 2021 on hopes for Sino-US trade deal
SHANGHAI/SINGAPORE, Aug 6 (Reuters) - The Shanghai benchmark advanced to its highest close in more than 3-1/2 years on Wednesday, underpinned by market hopes for an extended trade truce between the United States and China to reach a final deal. ** At the close, the Shanghai Composite index (.SSEC), opens new tab was up 0.45% at 3,633.99 points, marking the third straight session of gains, and booking the highest close since December 31, 2021. Meanwhile, the blue-chip CSI300 index (.CSI300), opens new tab was up 0.24%. ** Defence (.CSI399959), opens new tab and coal (.CSI000820), opens new tab shares led gains, rising 2.65% and 2.21%, respectively. ** U.S. President Donald Trump said on Tuesday the U.S. was close to a trade deal with China and that he would meet his Chinese counterpart, Xi Jinping, before the end of the year if an agreement is struck. "We're getting very close to a deal. We're getting along with China very well," Trump said. ** Winnie Chwang, portfolio manager at Matthews Asia, said investors would like to see more clarity from Sino-U.S. trade negotiations. "I do sense that, while there's been a bit more interest in revisiting the Chinese markets, there are also still investors that sit on the fence, primarily given the still uncertain nature of trade, and it's very difficult to make any sort of confident predictions," Chwang said. ** Jason Lui, head of East Asia strategy at BNP Paribas, said China's decision to re-impose value-added tax on interest rate income from new treasury, local government and financial bonds encouraged fund re-allocation. ** "By re-imposing the VAT, policymakers may have aimed to redirect funds from the rates market to the equity and the credit market," Lui said. "This move would also align with the commitment to 'strengthen the improving momentum in the capital market' as outlined by the latest Politburo meeting." ** In Hong Kong, the benchmark Hang Seng Index (.HSI), opens new tab inched up 0.03% at 24,910.63 points, while the Hang Seng China Enterprises index (.HSCE), opens new tab fell 0.21% to 8,932.68 points. ** Separately, market attention will shift to a string of domestic economic data due later this week, including trade on Thursday and inflation on Saturday, that will give clues on the health of the economy. ** A Reuters poll showed that China's export growth probably slowed in July, as manufacturers await clarity on whether Beijing can reach a deal with its top consumer market, the United States, or if Trump will reinstate additional tariffs on goods from China.
Reuters
01-08-2025
- Reuters
French insurer Axa to buy 51% stake in Italy's Prima
Aug 1 (Reuters) - French life and health insurer AXA ( opens new tab has agreed to buy a 51% stake in Italian direct insurance group Prima for 500 million euros ($571 million) as it seeks to strengthen its position in Italy's motor business, it said on Friday. The company, headquartered in Milan, generated 1.25 billion euros of premiums in Italy last year, and achieved around 10% of overall market share in the retail motor segment, Axa said. It also operates in Spain and United Kingdom. "The acquisition... will not only significantly enhance our position in the Italian P&C market but also bring capabilities to strengthen our direct business in European Markets", Axa European Markets & Health CEO Patrick Cohen said in a statement. The French insurer and other minority shareholders have been a granted call and put option, dependant on Prima's earnings, for the remaining 49% of the shares to be exercised in 2029 or 2030. Axa said that although it will own 51% of the company it expects to recapture 100% of the premiums generated in Italy and Spain by third party insurers. The French insurance group also said on Friday that its half-year net income edged down year-on-year to 3.92 billion euro, mainly due to "unfavourable" foreign exchange impacts. ($1 = 0.8756 euros)
