BNP Paribas Reports Mixed Performance

Shares in BNP Paribas (EPA:BNPP) slumped during European trading on Thursday after the results from the investment banking division underwhelmed investors.

Driven by increased trading activity, group net income for the three months ending in September rose by 7.8% year-on-year to 2.87 billion euros, slightly above company-compiled forecasts of 2.86 billion euros.

Sales grew as expected to 11.9 billion euros. The company reported it set aside 729 million euros for bad loans, compared to the projected 859 million euros.

BNP is relying on its investment bank to offset weaker retail sales and is pursuing acquisitions, including AXA's asset management arm and a stake in the insurance group Ageas, to enhance performance. Sales in its equity and prime services unit increased by 13% year-on-year, while its fixed income, currencies, and commodities division rose by 12%. Global corporate financing and advisory services grew by approximately 6% as well.

However, sales in the commercial and consumer finance sector fell by 2.6% due to declining used car prices impacting the vehicle-leasing segment.

Net interest income increased slightly by 1.7% as BNP navigated mortgage rate regulations and fixed savings accounts in France, which limited its ability to benefit from rising interest rates unlike other banks.

Despite these challenges, BNP reaffirmed its full-year guidance for revenue growth exceeding 2% compared to the previous year and group net income of over 11.2 billion euros.

Analysts at UBS noted, "We expect the focus on the domestic macro outlook, corporate and institutional banking momentum, retail income, and the implications of recent acquisitions to be key considerations today."

*(Reuters contributed reporting.)