BNP Paribas meets profit forecast thanks to investment bank (updated)

Ageas SA/NV

31/10/2024 07:25

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      Trading business offsets decline in car-leasing activity
    

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      Investment unit drives sales growth 
    

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      French bank confirms 2024 targets
    

  
 (Adds analyst notes in paragraphs 5,6)
    By Mathieu Rosemain
       PARIS, Oct 31 (Reuters) - BNP Paribas  BNPP.PA  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  DBKGn.DE . 
    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 Rosemain
Additional reporting by Bertrand de Meyer, Sudip Kay Gupta
Editing by Tommy Reggiori Wilkes, Ingrid Melander)
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