[PARIS] France's BNP Paribas on Tuesday became the first European major bank to post a profit rise for the first quarter, delighting analysts and sending its shares sharply higher.
Net profit grew by over 10 per cent year-on-year to 1.8 billion euros (S$2.77 billion) for the first three months of the year, thanks to one-off gains but also to improving credit risk, it said in a statement.
The bank's shares soared more than 3.5 per cent in early Paris stock market trading to 47.51 euros.
Analysts forecasts had centred on a 1.3-billion-euro net profit.
Even stripping out non-recurring gains, including from a downward revision of the company's debt value, net profit was still up four per cent, outperforming major European rivals Deutsche Bank, BBVA or Barclays.
Net banking income slipped two per cent, but was still better than market forecasts.
The impact of low interest rates on retail bank income was limited, with the segment's revenues slipping just 0.7 per cent.
Finance and investment banking revenue fell 19 per cent, however, as tough international market conditions took their toll.
A drastic 27.5-per cent fall for provisions against loans going bad was a great boost for BNP Paribas results, mostly thanks to an improving situation in Italy and a better repayment rate on personal loans.
"BNP Paribas reported this quarter good revenues resilience despite a particularly unfavourable environment: interest rates still low, stock market crisis, wait-and-see attitude by debt investors," the bank said.
BNP Paribas also managed to beef up its capital adequacy ratios, reserves it must set aside against unforeseen risk.
"The group's balance sheet is rock-solid," the bank's chief Jean-Laurent Bonnafe said in the statement.