Despite the decline of the main securities markets, the brokerage business owned by BNP Paribas, Cortal, posted a pre-tax profit of 3.8 million euros for the first half of 2002, compared with a 3-million-euro loss for the first half a year earlier. Net banking income (43,5 million euros) dropped by 12% for the first half of 2002 and the expenditures were adjusted in the light of the environment: management expenses were cut by 20%, staff was reduced by 12% and marketing expenses were divided by factor of 2.5 by comparison with the first 6 months of 2001.
The financial environment continued to affect the share brokerage business, down by 42% from the first half of 2001. On the other hand, mutual fund and life insurance inflows reached 556 million euros for the first 6 months of 2002, up 5% from the year-earlier period. To meet investors’ needs for safety, Cortal offers various guaranteed investments in France, Belgium, Luxembourg and Spain. In France, inflows on such investments represents about 1-5th of savings inflows.
The assets managed by Cortal in France, Belgium, Luxembourg, Spain and Italy, 81% of which are accounted for by investments other than directly owned securities, represented a total of 6,8 billion euros at the end of June 2002, down by 12% by comparison with end-June 2001. Over the same period, the Euro Stoxx 50 index declined by 18% and the CAC 40 by 16%.
As of the end of June 2002, Cortal managed a total of 607,000 clients, including 421,000 direct clients, compared with 628,000 clients, including 398,000 direct, at the end of June 2001. The decline of the number of clients managed is mainly due to the closing of inactive accounts managed by Cortal on behalf of partners. In France, the number of direct clients stands at 378,000, up 4% by comparison with the first half of 2001, mainly as a result of the taking over of American Express Bank’s Personal Financial Services clients in France by Cortal. Outside France, the number of direct clients (43 000) is up by 24% by comparison with the same period in 2001.
Following the takeover bid issued on June 12, BNP Paribas now holds 95,05% of the Consors AG capital. Under German legislation, the crossing of the 95% threshold enables BNP Paribas to initiate a squeeze-out procedure so as to acquire the remaining shares. Delist Consors AG in the coming months would facilitate integration of Consors and Cortal within the new CortalConsors group, while protecting the minority shareholders’ interest.
Present economic conditions confirm the strategic interest of development of the multi-product and multi-distribution model in the new CortalConsors group vis a vis European savers.
The first two phases of the integration process have been completed in accordance with the schedule calling for “two weeks, two months, two quarters”. The working groups, launched at the beginning of July, will specify by November the actions that will produce 53 million euros in synergies, including 15 million euros in revenue synergies and 38 million euros in cost synergies.
The new CortalConsors Group is aiming at 25 billion euros in assets under management and a pre-tax net profit of 100 million euros in 2005, with an operating account balanced as of 2003.