Charges linked to the COVID-19 pandemic ate into BNP Paribas’ net profit in the fourth quarter as the lender set aside more provisions for loans that could turn sour.
Rivals such as Santander have also been setting aside funds as lenders brace for loan repayment problems, although the crisis has also yielded a trading bonanza for some.
A surge in fixed income trading business boosted Q4 earnings but BNP Paribas warned that level of market activity was unlikely to persist this year.
The eurozone’s largest listed lender struck a more upbeat note for 2021, saying it expected its cost of risk, which reflects provisions for bad loans, to fall this year as the outlook improves in the second half.
-REUTERS