BNP Paribas Q3 Performance

By Mathieu Rosemain

PARIS (Reuters) – BNP Paribas (OTC:BNPQY) announced on Thursday that its investment banking division's increased trading activity helped meet profit forecasts for the third quarter, despite disappointing results from consumer finance and car-leasing operations.

As the largest lender in the euro zone, BNP delivered mixed results compared to many rivals that exceeded forecasts for the three months ending in September.

BNP reported a 7.8% rise in group net income for the quarter, amounting to 2.87 billion euros ($3.11 billion), slightly aligning with the 2.86 billion-euro average estimate from analysts.

Revenue increased by 3.1% year-on-year, reaching 11.9 billion euros, which was in line with expectations. The cost of risk, funds reserved for bad loans, was recorded at 729 million euros, better than the forecasted 859 million euros.

Under the leadership of long-time CEO Jean-Laurent Bonnafe, BNP has focused on expanding its investment bank to counter limited growth in its retail division, while also pursuing acquisitions to enhance its prospects. Recent ventures include the acquisition of AXA's asset management arm, AXA IM, for 5.1 billion euros, along with stakes in insurance company Ageas and HSBC's private banking activities in Germany.

The investment bank was the standout performer this quarter, benefitting from a robust trading environment similar to that seen on Wall Street and among rival European banks. Notably, equity and prime services sales rose 13% year-on-year, while fixed income, currencies, and commodities (FICC) also saw a close to 12% increase, surpassing Deutsche Bank's performance.

Global corporate financing and advisory services grew by almost 6%, according to BNP.

In contrast, the commercial and consumer finance division, CPBS, experienced a 2.6% revenue drop, mainly affected by a decline in the value of used cars impacting its car-leasing unit, Arval.

BNP Paribas registered a 1.7% increase in third-quarter net interest income compared to the previous year, maneuvering through a tough French retail market characterized by strict mortgage regulations and limited benefits from rising interest rates unlike its international counterparts.

On Thursday, BNP reaffirmed its targets for 2024, projecting revenue growth of over 2% compared to 2023 and a group net income exceeding 11.2 billion euros.

($1 = 0.9217 euros)