French Lender BNP Paribas Beats Earnings Views After Equities Trading Boost — Update

By Elena Vardon

BNP Paribas reported second-quarter earnings ahead of expectations, driven by a surge in equities trading at its global market division that offset softness in its domestic retail business.

The French lender on Wednesday said its net profit for the three months ended June 30 was 3.395 billion euros ($3.69 billion), beating the EUR2.91 billion estimate taken from a company-compiled consensus.

Revenue grew 4% on year to EUR12.27 billion, surpassing expectations of EUR11.93 billion, it said.

Its corporate and institutional banking division--which the group is betting on to gain market share and drive growth--posted a 12% revenue increase, boosted by performance of its markets business, particularly its equity and prime brokerage services division. A sharp increase in market activity and client demand led the unit's 57.5% on-year revenue surge to EUR1.15 billion.

For its retail business, the eurozone's largest bank by market capitalization reported broadly stable revenue from net interest income--the difference between what it earns on loans and what it pays clients for deposits--with impacts from inflation hedges in France that are set to neutralize in the third quarter. BNP Paribas said it also expects the headwinds from Belgian government bonds and European Central Bank mandatory reserves to start to fade in the second half of the year.

Shares in BNP Paribas edged down and traded around EUR64 in midday exchanges, with analysts attributing the pressure to the lender's mixed French retail revenue, which was also hit by higher costs from an unspecified "specific credit situation."

The bank's insurance and asset-management branch brought in EUR1.47 billion in revenue in the quarter, 3% ahead of the previous year, on positive marke- performance effects and net asset inflows, it said. Management has been beefing up this division through its recent acquisition of life-insurance joint venture Neuflize Vie and purchase of a stake in Belgian insurer Ageas and in French insurer Scor.

"BNP Paribas is well-placed in the new phase of the economic cycle and accordingly confirms its 2024 trajectory," Chief Executive Jean-Laurent Bonnafe said.

The Paris-based group targets revenue growth of 2% higher on 2023's distributable revenue of EUR46.9 billion and forecasts that net income will top its previous year's EUR11.2 billion.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

July 24, 2024 07:43 ET (11:43 GMT)

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