Bond Market News

European banking majors Barclays, Deutsche Bank and Banco Santander reported strong results.

• Barclays reported quarterly attributable profits of £1bn ($2.9bn) vs. £90mn in 2Q2020. For the half year, its profits were at £3.8bn ($5.3bn) vs. £695mn ($968mn) in 1H2020. Equities and investment banking (IB) revenues were up 38% and 27% respectively in H1, while Fixed Income Currencies & Commodities (FICC) was down 37%. During the half-year, it saw a release of £700mn ($975mn) in impairment provisions vs. a £3.7bn ($5.2bn) charge incurred for the same period of 2020. Its CET1 stood at 15.1%, flat vs end-2020. Barclays’ dollar bonds were unchanged – its 6.125% Perp was at 111.06, yielding 3.4%

• Santander reported net profits of €2.07bn ($2.45bn) in the quarter and €3.7bn ($4.4bn) in H1, vs. a loss of €10.8bn ($12.8bn) in 1H2020. Fee income was flat while trading and other income were up 13% YoY in the first half. Its cost of credit improved to 0.94% vs. 1.26% a year ago and loan-loss provisions fell to €1.7bn ($2bn) in Q2, down 41% YoY. Non-performing loans (NPL) stood at 3.22% vs. 3.26% in 1H2020. CET1 ratio stood at 12.11% vs. 12.3% in the previous quarter. Santander dollar bonds were stable – its 7.5% Perp was at 109.9, yielding 3.4%

• Deutsche reported attributable net profits of €692mn ($820mn) in Q2 and €1.6bn ($1.9bn) for 1H2021 vs. a loss of €120mn ($142mn) in 1H2020. Profits were helped by provisions for credit losses falling 89% in the half-year to €144mn ($171mn). Fixed Income & Currencies (FIC) revenues were up 10% YoY in H1 while its private banking revenues were flat after booking a loss in the quarter. The bank’s CET1 ratio stood at 13.2%, 10bp lower than the same period last year. Deutsche’s dollar bonds were flat – its 7.5% Perp was at 109.64, yielding 4.6%.