BNP Paribas reported a forecast-beating rise in third-quarter profit on Wednesday, as stronger investment banking revenue offset weakness in fixed-income trading, while the lender announced a €1.3B (US$1.4B) share buyback.
Full breakdown
France’s largest bank by assets recorded net income of €3.5B in the three months to September, up 14% year on year and above the €3.2B average forecast by analysts polled by the bank.
Revenue rose year on year to €13.8B, slightly exceeding expectations.
The results mark a second consecutive quarter of record equity and prime services revenue growth, with BNP’s equity trading revenue increasing 50% year on year.
Revenue at BNP’s corporate and institutional banking division, a key contributor to chief executive Jean-Laurent Bonnafe’s strategy, increased 17% YoY.
However, revenue from fixed-income, currencies and commodities trading was flat, reflecting broader weakness across the sector.
Retail banking income rose 4%, supported by higher interest rates.
Capital returns and sovereign debt exposure
BNP said it would launch the €1.3B share buyback in November after meeting its Common Equity Tier 1 capital ratio target at the end of June, ahead of schedule.
RBC analysts had expected the bank to bring forward a €1.2B buyback “to express confidence in its outlook”.
The results come as French banks face renewed scrutiny over their exposure to sovereign debt, following a rise in eurozone government bond yields and concerns about France’s fiscal position.
BNP said its exposure to French sovereign bonds stood at approximately €19B at the end of September. France accounted for less than 10% of the bank’s pre-tax income in the previous year.
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