Phiadvisor's Enter Long Signal on BNP (BNP-FR)

15/12/2020

We had an Enter Long signal on December 15th 2020, triggered by our system on BNP-FR, the French Bank.

BNP Paribas is a €53.9 Bn market cap is France's largest banking group. The first revenue segment is retail banking (58%) including retail banking activity in France (23% of NBP; 1,800 branches; 6.8 million clients at the end of 2019), in Belgium (13%), and Italy (10%; 2.7 million clients with BNL). The remainder of the NBP is derived from international activities and specialized financial services activities (consumer loans, real estate credit, leasing credit, car fleet management, computer equipment leasing); The second revenue segment consists on finance and investment banking (27% of revenues) including consulting and capital market activities (merger-acquisition consulting, activities related to the stock, interest, and exchange markets, etc.) and financing (financing for acquisitions, projects, raw material transactions, etc.).

The third pillar is institutional and private management and insurance (14% of revenues ) including asset management, private banking activity (No. 1 in France), real estate and on-line brokerage services, insurance and securities services (No. 1 in Europe for retained securities).

BNP is expected to recover progressivley from the health crisis, but looks like one of the best risk/reward in the European Bank universe, due to a 5% yield – ECB should allow EU Banks to pay dividend again next year- and solid balance sheet with CET1 ratio well above requirement and in an uptrend.

Short term catalyst: Vaccines rolling out, European recovery.

This signal looks consistent with the Bullish Reversal in the European Banking sector.