Was it Macron – or Deutsche Bank – that gave BNP's equities traders their best quarter in years?

Something good happened to BNP Paribas in the second quarter, and it didn't happen to the fixed income traders who have outperformed in the past. 

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This time, BNP can thank its equities salespeople and traders for their service. Second quarter equities and prime services revenue at the bank grew by a huge 38% on Q1, and by 46% on Q2 of 2023. BNP's equities professionals outearned the FICC team for the first quarter in five years.

While FICC traders struggled by virtue of what BNP said was poor commodities performance and "lower demand in Europe," in line with Deutsche Bank, BNP said the growth in equities revenues was due to "high demand."

“High client demand” seems to have been related to the French election. Euronext, the pan-European stock exchange which encompasses the Paris stock exchange, reported trading volumes for derivatives were up 22% in Q2 versus Q1. Cash trading was also up 6% in Q2 compared to Q1.

Who was to credit (or blame) for the huge volumes? In all likelihood, Emmanuel Macron. The French president’s call for a snap election in June, set off a flurry of selling – which BNP's own stock suffered from. 

Prime services were the other side of the equities coin. BNP’s prime brokerage has grown significantly; assets under management were up by 40% compared to the second quarter of last year. This was driven by the overall success of the hedge fund industry that it serves – the industry reached a record high $4.31tn under management this quarter, per Wealth Management.

The 46% YoY increase, therefore, was across the equities board. The bank said it had increased its market share in equities by 60 basis points since 2021 and 100 basis points since 2019. BNP credited its absorption of Exane (and its charming team) as a contributing factor to its performance in cash equities, specifically.

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