|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||50.06 - 50.67|
|52 Week Range||38.13 - 52.24|
|Beta (3Y Monthly)||1.38|
|PE Ratio (TTM)||8.56|
|Earnings Date||Feb 5, 2020|
|Forward Dividend & Yield||3.02 (6.01%)|
|1y Target Est||61.49|
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.A former trader at BNP Paribas SA’s investment banking arm in the U.S. who was fired over a one-day 17.3 million-euro ($19 million) loss, won nearly 1.3 million euros in an unfair-dismissal lawsuit.The Paris court of appeals said that Lionel Crassier, the bank’s former U.S. head of equities, was unduly punished twice by BNP. The judges ruled he was unfairly fired after the bank had already sanctioned him for the trading loss by abruptly recalling him from New York.Labor lawsuits are a rare opportunity to glean details on trading disasters. Last year, BNP lost a separate case in Paris after demoting its former global head of foreign exchange arbitrage over a 2.7 million-euro loss he suffered during his first month on the job. Even the country’s biggest trading loss ended with Jerome Kerviel briefly winning 455,500 euros before that unfair-dismissal award was overturned last year.dismissal letter, cited in the ruling, says the 17-year veteran built up a trading position on March 26, 2012, comprising 65,000 mini futures that exceeded his 100 million-euro overnight limit and generated the $19 million loss at market close.Crassier failed to react that day when BNP Paribas Securities Services, “surprised” by the volume, contacted him. It was only after his boss reached out that the former trader provided explanations, according to the dismissal letter.“You acknowledged having focused on volume, rather than the total value of your positions and without monitoring your P&L in real time, which is proof of your poor analysis and a flagrant lack of vigilance,” BNP said in the letter, in reference to his portfolio of trades. “Your behavior is unacceptable.”Officials at BNP said the bank doesn’t comment on court cases, when asked about the Nov. 26 ruling. A lawyer for Crassier declined to immediately provide a comment.The Paris court of appeals overturned a 2017 ruling from lower judges that had dismissed Crassier’s claims and ordered him to pay 500,000 euros to cover BNP’s legal fees. The appellate judges awarded him severance pay, unpaid bonuses and damages, but refused to compensate him for the career harm he suffered.Crassier sought 3.5 million euros to make up for his great loss in revenue and the “impossibility for him to work in a field he was passionate about” given the conditions of his dismissal.Crassier started his career at BNP as an equity derivatives options trader in the Tokyo office in the mid-1990s. His LinkedIn profile says he’s now a Geneva-based entrepreneur.(Updates with details on Crassier’s claims starting in ninth paragraph)To contact the reporter on this story: Gaspard Sebag in Paris at email@example.comTo contact the editors responsible for this story: Anthony Aarons at firstname.lastname@example.org, James HertlingFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- It was a big day for the bond pros at BNP Paribas SA - they were selling 1 billion euros ($1.1 billion) of the bank’s own debt to a market hungry for their product. So it’s no wonder buyers piled in when the notes were offered at a substantial discount.As the morning wore on and the bids poured in, the price kept rising. By the time terms were set at noon, the discount was virtually gone.“Everyone knows the game,” said Suki Mann, former head of credit strategy at UBS Group AG and founder of the CreditMarketDaily newsletter. “Banks make deals cheap enough to get investors in, then, once they’ve got huge books, they ratchet up the price.”Times, though, are changing. Investors squeezed by ultra-low yields are getting fed up -- one fund manager complained to BNP Paribas after the June 25 issue. The data confirm their impressions: the compelling yields that pique their interest at the outset are increasingly vanishing in the marketing.“It’s gotten much, much worse,” said Matthias Muth, a bond dealer at MRM Securities near Frankfurt and a veteran with more than 35 years in the industry.It’s a sign of how central bank purchases and negative interest rates have distorted markets. Investors are fighting for every basis point they can get: In August, a record 30% of all investment-grade securities were bearing sub-zero yields, meaning if investors held them to maturity they would lose money. The clamor for anything that yields anything is driving prices up even more.For euro-denominated tier 2 notes -- the kind of mainly finance-industry debt sold that day by BNP Paribas -- the average “tightening” between so-called initial price talk and pricing has averaged 26.9 basis points this year, according to Bloomberg data. That’s more than double last year’s 11.34 -- and the tighter the spread, the higher the price of the bond. In the investment-grade universe, the average this year is 23.1 basis points, up almost 50% from 2018.Tactics aside, the whole process of selling corporate bonds is increasingly coming under scrutiny. Regulators have called for more detail on how the debt is allocated and fintech start-ups are pushing to automate parts of the process, reducing humans’ control.For their part, bankers wonder what the fuss is about. They say pricing reflects nothing more sinister than supply and demand.“The strength remains very much in the hands of issuers” as it has since the European Central Bank started adding corporate-bond purchases to its arsenal three years ago, said Tim Hall, former global head of debt capital markets at Credit Agricole SA. As years passed, the leverage “has shifted even more decisively to issuers.”Umang Vithlani, head of credit at Fideuram Asset Management in Dublin, says he’s pulled out of deals when bonds he wanted got too expensive: he recalled a July sale by EnBW Energie Baden-Wuerttemberg AG, which included multiple managers such as BNP Paribas, Barclays Plc and Citigroup Inc. and tightened more than 70 basis points from guidance to sale. He also withdrew from one by Royal KPN NV that was arranged by BNP, Barclays, Goldman Sachs Group Inc. and Royal Bank of Scotland Group Plc.On the other hand, he stayed in when French insurer La Mondiale’s spread narrowed a whopping 62.5 basis points from beginning to end in an Oct. 17 sale arranged by HSBC Holdings Plc, Morgan Stanley and Natixis. He still liked the 4.375% final coupon.“People need to be invested,” said Vithlani, who oversees 4 billion euros. “Investors have no choice but to accept the price they’re being given in the primary market to get their money to work,” saying there’s sometimes not enough supply in the secondary market.But it was BNP Paribas’ deal on June 25 that fueled a client complaint and led to an internal review. The French bank concluded that its syndicate desk in London had done nothing wrong. Alexandra Umpleby, a spokeswoman for BNP Paribas in London, declined to comment.When the bank started circulating price guidance at 8:39 a.m. at 170 basis points over the base level known as mid-swaps, the yield curve implied that the fair market spread of its 12-year tier 2 debt was 112.7 basis points, according to Bloomberg BVAL data. As investors piled in, the bank slashed the estimate to 140 basis points. Finally, they priced at 130 basis points above the mid swaps, for a yield of 1.63%. They’ve rallied since then, along with the market, showing a spread of about 118, according to Bloomberg data.From BNP Paribas’s point of view it was a great result. It saved more than 400,000 euros in payments over the life of the bonds and the deal was nearly four times covered, a stamp of approval in credit markets. While banks aren’t compensated based on a bond’s pricing, they are judged on their ability to drum up demand and get deals away cheaply.“People are so desperate to get cash invested they’re not likely to punish the cheeky initial talk,” said Gordon Shannon from TwentyFour Asset Management LLP, which oversees 15.3 billion pounds ($20 billion).Eventually, though, investors will have had enough, says Shannon. “At some point there will be a deal where enough orders drop away on the tightening that it will spoil the deal,” he said. “And the risk of that happening would scare banks from behaving that way again.”To contact the reporters on this story: Harry Wilson in London at email@example.com;Liam Vaughan in London at firstname.lastname@example.org;Donal Griffin in London at email@example.comTo contact the editors responsible for this story: Vivianne Rodrigues at firstname.lastname@example.org, James HertlingFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Goldman Sachs Group Inc. agreed to pay $20 million to settle an investor lawsuit accusing traders at the bank, along with 15 other financial institutions, of rigging prices for bonds issued by Fannie Mae and Freddie Mac.As part of the settlement, disclosed Friday in a court filing, Goldman Sachs will cooperate with investors in their case against the other banks. The firm also agreed to make changes to its antitrust-compliance policies related to bond trading. A federal judge in Manhattan must approve the settlement before it can take effect.Investors sued after Bloomberg reported in 2018 that the U.S. Department of Justice was investigating some of the world’s largest banks for conspiring to rig trading in unsecured government bonds.Goldman Sachs has turned over 71,000 pages of potential evidence, including four transcripts of chat-room conversations among its traders and some from Deutsche Bank AG, BNP Paribas SA, Morgan Stanley and Merrill Lynch & Co., according to court papers filed Friday. The bank agreed to provide additional help, including deposition and court testimony, documents and data related to the bond market.Goldman Sachs isn’t the first to resolve the civil claims. In September, Deutsche Bank agreed to settle for $15 million. First Tennessee Bank and FTN Financial Securities Corp. agreed to a $14.5 million settlement later in September.Among the firms remaining as defendants in the case are Credit Suisse AG, Barclays PLC and Citigroup Inc.The case is In re GSE Bonds Antitrust Litigation, 19-01704, U.S. District Court, Southern District of New York (Manhattan).To contact the reporter on this story: Bob Van Voris in federal court in Manhattan at email@example.comTo contact the editors responsible for this story: David Glovin at firstname.lastname@example.org, Steve StrothFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Germany’s finance minister Olaf Scholz acknowledged this week that the European Union needs to make progress on cementing a banking union. The bloc’s growing reliance on American and British banks to underwrite the bulk of its capital markets activity, combined with the prospect of Brexit putting up barriers to European lenders accessing London-based capital, helps explain his new urgency.While domestic politics is playing a part in Scholz’s newfound warmth for the project (as my colleague Leonid Bershidsky argues here) and his insistence on important red lines may hinder progress (as Ferdinando Giugliano suggests here), he described his key motivation in an article for the Financial Times succinctly:Now that the U.K., home to London's capital markets, is on the verge of withdrawing from the bloc, we must make real progress. Being dependent for financial services on either the U.S. or China is not an option. So if Europe does not want to be pushed around on the international stage, it must move forward with key banking union projects, as well as the complementary project of capital markets union.Companies in Europe, the Middle East and Africa have raised more than $78 billion in equity offerings this year. In equity underwriting, Wall Street banks are becoming more dominant as Deutsche Bank AG and BNP Paribas SA, the EU-27’s biggest players in this field, cede market share.More than 40% of that underwriting business was led by JPMorgan Chase & Co., Morgan Stanley, Goldman Sachs Group Inc. and Citigroup Inc. Deutsche Bank’s market share has more than halved in three years.There’s a similar picture in the league tables for international bonds, where borrowers have raised more than $3.8 trillion this year. JPMorgan’s position as top lead underwriter in that category gives it a market share of almost 8% for the past three years, double that of Deutsche Bank. While BNP has increased its share to 4.4%, it remains well behind JPMorgan, Citi and Bank of America Corp. as well as London-based HSBC Holdings Plc and Barclays Plc.So Scholz is absolutely right to worry that the EU risks being starved of capital if its financial services industry continues to stumble from crisis to crisis and its markets remain fragmented. The plan earlier this year to create a national banking champion by merging Deutsche Bank with Commerzbank AG — a project endorsed by Scholz — was doomed to fail. But a cross-border European champion able to compete with Wall Street and the City of London is sorely needed.To contact the author of this story: Mark Gilbert at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- It’s rare for a European bank to be adding businesses nowadays, as capital constraints curtail dealmaking. The takeover of Deutsche Bank AG’s hedge fund activities by France’s BNP Paribas SA is an exception.There’s no mistaking what’s driving BNP: Absorbing a larger competitor with a chunky client base is one way to try to salvage its own ailing hedge fund division, and to stop its rivals from snapping up Deutsche’s clients themselves. Yet the French bank’s struggles in this business beg the question as to how easily the two units can be combined, let alone expanded.Income from BNP’s equity arm and its operations servicing hedge funds (which sit together in one division of the bank) declined for the fourth consecutive quarter in the three months to September — a fall of 15% this time. A drop in equity derivatives revenue was offset partially by a slight increase in hedge fund business. That’s no doubt a signal from BNP that its gradual absorption of Deutsche’s unit is already encouraging more hedge funds to start using the French bank.BNP is taking over Deutsche Bank’s electronic trading platforms and wants to snag as many as possible of the German lender’s customers. It aims within a year to become one of the world’s top-four prime brokerages (which service hedge funds), Bloomberg News has reported. Ultimately it’s seeking to hold about $300 billion in hedge fund money, or “balances” in industry parlance. That compares with the $500 billion that JPMorgan Chase & Co. already oversees as one of the market leaders. The U.S. bank is eyeing $1 trillion.For the French lender, the long slog is just starting. While the takeover will be completed at the end of 2019, it will take another two years for as many as 1,000 Deutsche employees to move over to BNP. You need to tread carefully when hedge funds have the option of shifting their money to the big Wall Street prime brokerages. Deutsche’s clients have already been defecting and it’s uncertain how much of the $80 billion or so of balances it held in September will transfer across to BNP ultimately.After buying Bank of America Corp.’s prime broking activities in 2008, BNP has stayed focused on U.S. clients. Deutsche should bring more exposure to Asian and European clients, and its trading technology should let BNP go after big quant fund customers.The biggest difficulty is avoiding a culture clash. This deal will mean a sharp rise in the number of products the French bank offers to hedge funds, and its volume of work. Before now, its prime brokerage has been cautious when deciding the type of business (and client) it’s prepared to take on. Deutsche’s has been more adventurous. Melding these different approaches on how much leverage and risk to allow will be critical.There’s about $450 million of extra annual revenue up for grabs here, but BNP has more than $47 billion of yearly sales so it’s hardly game-changing. Venturing into the uncharted territory of a much bigger derivatives business will see BNP edging higher up the danger curve.To contact the authors of this story: Elisa Martinuzzi at email@example.comMarcus Ashworth at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Mark Hurd was in his element at Indian Wells.The tennis tournament–more formally known as the BNP Paribas Open at Indian Wells, California— provided him with the perfect backdrop to flex his passions: tennis and selling stuff. Hurd turned the event, which Oracle Corp. co-founder Larry Ellison bought in 2009, into a two-week database and software sales extravaganza. He could be seen strolling the grounds or at nearby hotels constantly schmoozing with customers and using his connections with tennis legends like Chris Evert and Rafael Nadal to win people over and help close a deal. Along the way, Hurd, Oracle’s co-CEO, would sneak in a hit–he had a big serve and liked to flaunt it–or check on the American college players he was mentoring and the young pros he was quietly helping with financial aid. For Hurd, business and pleasure were one and the same and almost always intermixed in his life.This is what I’ll remember most about Hurd, who passed away Friday morning after a protracted illness: he was a relentless hustler and loved the art of doing business more than just about any other executive I’ve ever run across. In a statement issued after Hurd’s death, Ellison pointed to his friend’s business acumen. “Oracle has lost a brilliant and beloved leader who personally touched the lives of so many of us during his decade at Oracle,” Ellison said. “All of us will miss Mark’s keen mind and rare ability to analyze, simplify and solve problems quickly.” Hurd arrived at Oracle in 2010 under tumultuous conditions. He’d resigned as CEO of Hewlett-Packard after being investigated by the company’s board for a relationship Hurd had with a marketing contractor. The board argued that Hurd had tried to cover up the relationship and misused his expense account, and Hurd argued that they were wrong and making much ado about nothing. The squabble was acrimonious enough to end Hurd’s time at HP, even though he had revived the company’s fortunes and turned it into a lean, mean maker of corporate technology products, printers and personal computers.At Oracle, Hurd applied his trademark skills at analyzing balance sheets and streamlining operations to try and improve the software maker’s bottom line. He could recite from memory the financial minutiae of every division and be blunt about what was working and what needed to be fixed. During his years at Oracle, the company’s share price more than doubled, and Hurd was a constant presence at the company’s events, sales meetings and customer sites. In many ways, he became the public face of Oracle, enjoying the limelight while Ellison made the occasional appearance and co-CEO Safra Catz preferred to operate in the background.Though Oracle remains the dominant database company, it still has much work to do to catch up in the booming market for cloud-based software and services. Oracle was late to the game modernizing its products. Hurd tried his best to paper over Oracle’s weaknesses through salesmanship and often succeeded. One of the biggest weaknesses throughout his career, though, was favoring bottom line performance over investing in research and development and revolutionary new products. Hurd often seemed to focus on the here and now, rather than plotting for what lay ahead. Oracle’s dual-CEO structure was unusual and not always to Hurd’s liking, as he reveled in controlling a business and overseeing all of its operations. He took on sales, marketing and press and investor relations, and Catz handled finances and legal. Last month Oracle said that Hurd was taking a leave of absence for an unspecified illness and that Ellison and Catz would assume his responsibilities. Ellison has said that Catz will stay in place and that he would like to keep the two-CEO structure. He cited Don Johnson, head of Oracle’s cloud infrastructure division, and Steve Miranda, head of Oracle’s applications unit, as possible partners to Catz in the future.What’s clear is that Hurd will not be easy to replace. On a personal note, he shared a tight bond with Ellison around tennis. The two men have been pumping money into American tournaments and players for years, hoping to spark a revival of U.S. male pros. And, when Hurd was at his lowest moment after the HP fiasco, it was Ellison who came to the rescue, championing Hurd in the press and offering him a high-profile gig at Oracle. These actions–along with massive annual pay packages-made Hurd very loyal to Ellison and left Hurd as eager as ever to prove Ellison right and his critics wrong.Not short on ego, Hurd saw business as a battlefield and perceived himself as a master general. On his worst days, he was short of temper and combative. But, on his best days–of which there seemed to be many–he was a numbers and strategy savant with a rare ability to inspire those under him to work incredibly hard. Hurd himself was a workaholic and considered Oracle’s performance as a reflection on his character. Very few people are as committed to their work or as passionate in their pursuit of it.Vance covered Hurd for 15 years in his roles as CEO of NCR, HP and Oracle and even played tennis with him once. To contact the author of this story: Ashlee Vance in Palo Alto at firstname.lastname@example.orgTo contact the editor responsible for this story: Molly Schuetz at email@example.com, Robin AjelloFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.