BNP Paribas arm's FY18 net profit rises 8.7% to Rs 3.86 billion

The foreign bank's primary focus in India has been on corporate and wholesale banking

BNP Paribas India, the local arm of the global banking group, has posted a marginal 8.7 per cent rise in net profit at Rs 3.86 billion for the financial year ended March 2018, as against Rs 3.55 billion for the previous fiscal.

However, in financial year year 2018, BNP Paribas India’s total income declined to Rs 24.90 billion as against Rs 26.43 billion in FY17, according to rating agency CRISIL.

The banking arm’s primary focus in India has been on corporate and wholesale banking. Its total assets rose to Rs 442.47 billion at end of March 2018, up from Rs 422.99 billion at end of March 2017.

Joris Dierckx, chief executive officer and country head of BNP Paribas India, said that a balance sheet growth of five per cent in FY18 may appear to be little changed but it is in a market that is not expanding given that credit demand has been weak. The bank will continue to focus on growing its local balance sheet as credit demand picks up and trade volumes improve, he added.

 “Our market share grew substantially from 2013 to 2017, making us the fifth largest foreign bank in 2017, from tenth place in 2013. During this time, our local balance sheet grew four times,” he said.

Dierckx said non-interest income grew by 15 per cent to Rs 3.54 billion in FY18. The bank has been active in providing clients with solutions for hedging their interest rate and foreign exchange risks.

“We expect to continue to grow our fee-based income. However, the margins on lending are likely to remain under pressure given dynamic interest rate movements and the highly competitive segment we operate in,” Dierckx said.

A large part of its customer base includes global clients of BNP Paribas whose affiliates/subsidiaries are operating in India. While the bank, with eight branches, lacks a presence in retail banking, it offers selective services to individual clients through its wealth management division.

During the financial year, BNP increased the capital in the bank’s Indian branches by Rs 12.15 billion. It is well-placed in terms of capital adequacy to meet growth ambitions and client requirements, Dierckx said. The bank’s Tier I capital adequacy ratio (CAR) remained comfortable at 13.07 per cent with overall capital adequacy of 15.38 per cent as on March 31, 2018. BNP Paribas India’s adequate capitalisation is supported by capital infusion from the head office, whenever needed.