Month: May 2016

French bank BNP Paribas reported a 10 percent rise in net profit in the first quarter, beating expectations, but its investment banking division took a hit from a volatile market environment.

Net income came in at 1.814 billion euros (USD 2.09 billion), up 10 percent from the same quarter in the previous year and above a forecast of 1.664 billion euros. Underlying net profit accounting for one-off items came in at 1.607 billion, up 4 percent year-on-year.

The bank said that revenues held up well in domestic and international markets and financial services amid, it said in its earnings release, a “particularly unfavorable environment this quarter.”

Chief Financial Officer Lars Machenil told CNBC that the results were satisfactory but that the Corporate and Institutional Banking (CIB) division – the bank’s investment banking arm – was impacted by volatile market conditions in the first quarter.

“If we just take a step back indeed for the bank as a whole we had a good set of results and particularly domestic markets and international financial services had its revenues held up well and all that cost control, low cost of risks, significantly down actually, led to 1.8 billion euros of results,” he told CNBC on Monday ahead of the earnings report release.

“But it is true that the first quarter, and particularly the start of it, was impacted by a particularly unfavorable market environment, which for us impacted our CIB which had a drop in revenue of 15 percent if you exclude FVA (funding valuation adjustment).”

He said the bank saw saw lower client flows in global markets due to concerns about growth in the wider economy but also there were “uncertainties” surrounding the regulatory treatment of some subordinated debt monetary policy.

“So this was what we saw in the first couple of months and which weighed a bit on the revenues if you look towards the end of the quarter, you saw a pickup towards a more normal kind of activities.”

In the fourth quarter, BNP reported that a 51.7 percent drop in net profit from the same quarter in the previous year, to 665 million euros. The group recorded one-off transformation and restructuring costs related to acquisitions, as well as a 69 million euro contribution to a dedicated fund for the resolution of four Italian banks.

It also reiterated that it wants to achieve 1 billion euros in cost savings by 2019 and reduce risk-weighted assets by 20 billion euros. BNP said it needed to transform itself to cope with “restraints” such as European capital ratio requirements and banking regulations.

These challenges were unlikely to be resolved in the foreseeable future, the bank warned. It also flagged other headwinds, including low interest rates, the strength of the Swiss franc – particularly against the euro – and proposed changes to the Swiss and international regulatory frameworks for banks that will result in higher capital requirements and costs. UBS added however that it was well positioned to meet upcoming requirements for Swiss “systemically important” banks.

The bank confirmed it would pay an ordinary dividend of 0.60 Swiss francs per share, as well as a special dividend of 0.25 per share, for 2015. Its AGM will take place on May 10.

UBS is on track to make net cost reduction of 2.1 billion Swiss francs by the end of 2017.

Billionaire investor Warren Buffett told CNBC on Monday just how important interest rates are to stock investing.

“If the government absolutely said interest rates are going to be zero for 50 years, the Dow would be at 100,000,” Buffett told “Squawk Box,” stressing he was speaking hypothetically. The Dow Jones industrial average closed at 17,773 on Friday.

In a CNBC interview last week, Buffett also spoke about interest rates. “If you had zero interest rates and you knew you were going to have them forever, stocks should sell at, you know, 100 times earnings or 200 times earnings,” he said.

Consider this: Near zero percent rates from December 2008 to mid-December last year helped pushed the Dow up more than 100 percent. That happened as Wall Street was waiting for the penny to drop on a hike, which finally happened Dec. 15, 2015.

If zero rates were a certainty for 50 years, Buffett was basically saying stocks could make a move exponentially higher, when considering how far the Dow came in just seven years.

The chairman and CEO of Berkshire Hathaway was interviewed in Omaha, Nebraska, where he hosted the annual meeting of the company’s shareholders on Saturday.

Speaking Monday on CNBC’s “Squawk Box,” Gates said that he’s “pleased” that there is more discussion around changing the tax code. When asked what he would alter, Gates sided with his pal Warren Buffett and said he supports raising the earned income tax credit.

But Gates also said he would raise the tax rate for capital gains — the largest source of income for the richest Americans. The current top tax rate on capital gains is 20 percent (with the highest earners paying an additional 3.8 percent surtax). The top tax rate on ordinary income is 39.6 percent.

“There’s always been the question of whether taxes on capital should be a lot lower than taxes on labor,” Gates said. “I tend to think they should be pretty much the same, and that that’s an opportunity to be a bit more progressive.”

When asked in the interview whether “the same” translated into lowering ordinary income rates or raising capital gains taxes, Gates said he preferred raising capital gains taxes.

Some hot global property markets may be showing signs of cooling off, but that hasn’t dissuaded Dubai’s Emaar Properties. This week, the company launched a stunning showcase of its latest luxury project at upmarket London department store Harrods.

The event comes amid tough times for the city state’s property market. Real estate services company, Jones Lang LaSalle (JLL), claims villa and apartment prices have fallen by 11 percent and 10 percent respectively in the past year, with hotel rates also heading south.

Emaar’s project will feature what is set to be the world’s tallest tower, taking the title from its own existing Burj Khalifa construct in Dubai, which rises to 828 meters. Emaar’s reign may be challenged however: Saudi Arabia’s Jeddah Tower, scheduled for completion in 2018, aspires to snatch the title.

So is another towering trophy asset really what the city needs?