BNP Paribas' profit drops less than feared in Q3

[PARIS] France's biggest bank BNP Paribas reported on Tuesday third-quarter net income fell less than expected, as trading revenue rose.

Bumper trading volumes have helped most major European banks show better-than-expected third-quarter earnings, along with a more optimistic outlook on loan losses caused by the financial fallout from Covid-19.

BNP Paribas reported quarterly net income of 1.89 billion euros (S$3.01 billion), down 2.3 per cent from the same period a year ago. Revenue was broadly flat at 10.89 billion euros.

Analysts had forecast net income closer to 1.57 billion euros and revenue closer to 10.66 billion euros, according to the IBES estimate from Refinitiv.

Revenue at its corporate and institutional bank rose by 17.4 per cent, while fixed-income trading revenue jumped by 36 per cent "with a good level of client activity on the rate and forex markets".

Higher bond and equity underwriting revenue also propelled the results, as companies tapped the markets in order to strengthen their balance sheets.

BNP Paribas, which has a 2.6 trillion euros balance sheet that is mostly exposed to Europe, said that the economic recovery was gradual in the third quarter with momentum that was different from one region or sector to another.

Its cost of risk, which reflects provisions for loans that may turn sour, was up year-on-year by 47 per cent to 1.24 billion euros, but came lower than in the second quarter of this year or than analysts had anticipated.

"BNP Paribas demonstrates its high resilience thanks to its financial solidity, its diversification, and the power of execution of its platforms," chief executive Jean-Laurent Bonnafe said in a statement.

Its net income in the first nine months was down by 13.4 per cent, running ahead of its full-year profit guidance of minus 15-20 per cent which the bank did not change.

REUTERS