By Mathieu Rosemain
PARIS (Reuters) -The European Union is likely to postpone new capital requirements for banks’ trading operations for about three years, BNP Paribas Chief Executive Jean-Laurent Bonnafe told analysts on Tuesday.
The European Union is set to delay the new rules – called the Fundamental Review of the Trading Book – as it waits for more clarity about the U.S. administration’s plans to deregulate its financial sector, sources told Reuters in May.
“Probably you know, that there are conversations at the level of the European Commission just to neutralise this FRTB for probably a period of three years,” Bonnafe said during a conference call following the bank’s third-quarter results.
“This is not done, but there is a certain probability, probably more than 50%, that one way or the other, that FRTB is going to be neutralised for a certain period of time,” he added.
The FRTB implementation date has already been pushed back several times, from early 2025 to early 2026 and then to early 2027.
Bonnafe said BNP Paribas’ core capital is running ahead of plan, with a Common Equity Tier 1 (CET1) ratio around 12.5%, and the bank does not expect end-2025 targets to be revised down regardless of the rule change timeline.
Even if the FRTB rules are implemented as scheduled, BNP Paribas expects to maintain its capital position through increased profitability, Bonnafe said.
(Reporting by Mathieu RosemainEditing by Mark Potter)
