More restrictive monetary policies have given a strong boost to European banks, which have long been suffering. It may seem surprising, therefore, that BNP Paribas mentioned the prospect of rate cuts later this year as a positive.
Slightly looser monetary policy is not a cause for concern even for competitors such as Deutsche Bank and Barclays.
CEO Jean-Laurent Bonnafé said alongside the €78 billion French bank’s first-quarter results that its revenue will rise by at least 2% in 2024. The bank expects a boost from rate cuts in the second half of the year . Markets believe the European Central Bank will cut its interest rates two or three times in 2024, with the deposit rate at the end of the year standing at around 3.25% or 3.5%, compared to 4% current. This is based on LSEG calculations using interest rate derivative prices. […]
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