Latest news with #Machenil
CNBC
24-07-2025
- Business
- CNBC
Top Europe banks warn of euro strength, 'wait-and-see' market amid U.S. tariffs
Some of Europe's top banks have sounded alarm bells over the strength of the euro and outlined how U.S. tariffs have reshaped the investment landscape in the second quarter. Germany's largest lender Deutsche Bank on Thursday reported a second-quarter profit beat but noted, across the board, the effects of the relative strength of the euro against the U.S. dollar. Speaking to CNBC's Annette Weisbach, the lender's Chief Financial Officer James von Moltke said the currency appreciation is the "big thing that's kind of flowing through our numbers," which showed mixed results in Deutsche Bank's core investment banking subdivision. At BNP Paribas , continental Europe's largest bank by assets, the global markets unit saw a 26.8% year-on-year boom in the fixed income, currencies and commodities subdivision, despite a "more challenging environment than last year, impacted by tariff announcements, geopolitical uncertainties, and the dollar's depreciation vs. the euro." Zeroing in on foreign exchange rates, CFO Lars Machenil told CNBC's "Europe Early Edition" that the euro strength meant "all the income generated outside of Europe was a bit impacted by that." Critically, banks with high U.S. activity can suffer the impact of the greenback's depreciation when converting dollar earnings into local currencies — particularly in the case of the recently strengthening euro. The European currency has added 13.46% against the greenback in the year to date, according to LSEG data, spurred on by volatility surrounding U.S. President Donald Trump's tariffs and their impact on the outlook of the world's largest economy. The latest activity from relevant central banks is supporting both currencies, with the U.S. Federal Reserving holding interest rates in June, while the European Central Bank on Thursday kept monetary policy unchanged . The 27-nation European Union and Washington are still locked in a race to agree a trade deal by Washington's Aug. 1 deadline, before Trump materializes a threat to impose a 30% levy on the bloc's exports to the U.S. The ongoing fog over the trade future of the two former transatlantic allies is reshaping the market and investment picture for market and corporate activity. Stateside, top lenders cashed in on their trading dominance and benefitted from Trump policies rattling markets for bonds, currencies, equities and commodities. In Europe, BNP Paribas' Machenil said the uncertainty led to a "wait-and-see" approach that the bank also cited for the stable quarterly performance of its global banking unit, which houses its operations in mergers & acquisitions and equity and debt capital markets. "It's not that [clients] are all retracting and saying we're going to stop financing," Machenil stressed. "It's a bit wait and see, waiting to see where the opportunities are. So the discussions and the pipeline are very active." Italy's second largest lender UniCredit — which on Wednesday posted a 25% year-on-year hike in second-quarter net profit — pointed to "macro volatility and U.S. tariff concerns, which temporarily shifted activity towards trading in Q2." Deutsche Bank's Von Moltke said that U.S. tariffs could translate into a "relatively steep" hike in currency conversions and an ultimate "headwind" for European exporters, while noting that the impact of the levies would be "very varied" for each corporate business. The European second-quarter earnings season has now fully kicked off, with two other major European banks, Britain's Barclays and Swiss lender UBS , due to report next week.
Reuters
24-04-2025
- Business
- Reuters
BNP Paribas CFO: Two elements to AXA IM deal explain capital hit
PARIS, April 24 (Reuters) - The European Central Bank sees two elements to BNP Paribas' ( opens new tab 5.1-billion-euro ($5.8 billion) acquisition of AXA's asset management arm, BNP's finance chief said on Thursday, explaining the capital requirements made by the central bank. "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)
