By Mathieu Rosemain
PARIS (Reuters) -BNP Paribas said on Thursday that increased trading activity at its investment banking division helped it meet profit forecasts in the third quarter, after its consumer finance and car-leasing businesses disappointed.
The French bank, the euro zone’s largest lender, delivered a mixed bag of numbers that contrasted with the forecast-beating results seen at many of its rivals for the three months to end-September.
BNP said group net income over the three-month period ending in September was up 7.8% from a year earlier on a reported basis to 2.87 billion euros ($3.11 billion), in-line with the 2.86 billion-euro analyst average estimate it had compiled.
Revenues rose 3.1% on a reported basis versus a year earlier to 11.9 billion euros, meeting expectations. The cost of risk — money set aside for bad loans — came in at 729 million euros, lower than the 859 million euros expected on average by analysts.
“BNPP reported an underwhelming set of results,” analysts at Keefe, Bruyette & Woods said in a note to clients. “Overall, we had quietly hoped for more. Areas such as equity revenues and retail revenue performance will be questioned.”
Jefferies said it had hoped for an even better performance at BNP’s investment bank division CIB.
BNP Paribas, led by long-time CEO Jean-Laurent Bonnafé, has been expanding its investment banking operations to counter slower growth in its retail division
The lender has also turned to acquisitions to try and boost its fortunes, with recent planned deals including buying AXA’s asset management arm, AXA IM, for 5.1 billion euros, a 9% stake in insurance company Ageas and acquiring HSBC’s private banking activities in Germany.
BNP’s investment bank was the group’s best performer in the quarter, following on from a strong showing on Wall Street and at rival European houses as investors traded in buoyant markets.
Its equity and prime services sales rose 13% year-on-year and BNP saw a close to 12% increase in fixed income, currencies and commodities (FICC), a slightly better performance than Germany’s Deutsche Bank.
Global corporate financing and advisory services grew by close to 6%, BNP said.
By contrast, BNP’s commercial and consumer finance division CPBS saw revenue fall 2.6%, weakened by its car-leasing unit Arval as the sale price of used cars continued to drop.
BNP Paribas reported a 1.7% rise in third-quarter net interest income versus a year earlier, as it navigated a challenging French retail market where strict mortgage rate regulations and fixed savings accounts have denied French banks the same windfall from higher interest rates enjoyed elsewhere.
The French lender on Thursday confirmed its 2024 targets, which included revenue growth of more than 2% compared with 2023 and a group net income of more than 11.2 billion euros.
($1 = 0.9217 euros)
(Reporting by Mathieu RosemainAdditional reporting by Bertrand de Meyer, Sudip Kay GuptaEditing by Tommy Reggiori Wilkes, Ingrid Melander)
