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BNP Paribas posted better than expected revenues and net profit for the first quarter, boosted by surging trading income after a push to build out its investment bank.
France’s largest listed lender upheld its financial targets to 2025, despite economic growth stalling in its home market and the fallout in the eurozone from Russia’s invasion of Ukraine. Its goals include yearly revenue growth of more than 3.5 per cent and a drive to return 60 per cent of profits to shareholders.
Revenues increased 11.7 per cent in the first quarter year on year to €13.2bn, while net income came to €2.1bn, up 19.2 per cent, beating analysts’ forecasts.
The bank benefited from a lower cost of risk, with charges on bad loans down sharply after a period dominated by the coronavirus pandemic and as it released some provisions linked to Bank of the West, which it is selling.
Like US rivals, BNP Paribas noted that dealmaking had cooled in the first three months of the year, and companies issued less debt and equity to finance acquisitions. But the bank’s equities and fixed income trading revenues rose sharply, with earnings from equity trading up nearly 61 per cent.
The group has integrated a prime services business it acquired from Deutsche Bank, a unit that serves hedge funds, and has brought its Exane equities brokerage fully in-house, as part of a broader push to gain an edge on rivals retreating or restructuring their investment banking units.
BNP Paribas expanded lending across the eurozone at the height of the coronavirus pandemic and has been seeking to build on this.