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BNP Paribas reported a 9 per cent rise in first-quarter net income on Thursday as its asset management revenues increased sharply, although the French lender and its rival Crédit Agricole missed out on the trading boom that has boosted Wall Street banks.
BNP, France’s biggest bank, recorded net profit of €3.2bn for the three months to March 31, compared to €3bn one year earlier. This was a record for a first quarter and exceeded analysts’ expectations.
The company was boosted by higher revenues from commercial and personal banking, where BNP is benefiting more from higher interest rates, and it has also been cutting costs while improving its capital ratios.
Revenues more than doubled from one year earlier at BNP’s asset management business, reflecting the company’s acquisition of Axa Investment Managers.
BNP’s investment bank performance was more muted, however, echoing similar trends at Crédit Agricole, France’s second-largest bank, which also released results on Thursday.
A weaker dollar has made it harder for European lenders to capture gains in euros from the trading boom driven by volatility stemming from the Iran war and US President Donald Trump’s military intervention in Venezuela.
BNP’s global markets revenues rose 2.5 per cent, helped in part by equities trading that made up for more muted fixed-income business.
But that fell short of the bumper 20 per cent plus increases in first-quarter trading revenues reported by the likes of Morgan Stanley and JPMorgan earlier this month.
BNP’s revenues from advising on financing and deals fell nearly 10 per cent, and it pointed to “delayed activity” in March, linked to geopolitics including the Iran war.
The company’s revenues from its investment bank dropped 0.8 per cent to €5.2bn.
Revenues at Crédit Agricole’s investment bank fell 4 per cent in the first quarter, as fixed-income business dropped 6.4 per cent, but the company’s advisory business on deals recorded a strong performance.
The bank’s overall net profit rose 1.8 per cent to €1.7bn in the three months to March 31, slightly below analysts’ forecasts contained in a Refinitiv poll.
Crédit Agricole reported a higher cost of credit risk than a year ago as it booked a series of provisions, including €28mn for “geo-sectoral” risks linked to the Middle East conflict. It said this was a prudent step to reflect possible economic fallouts.
Both the French banks booked provisions to cover legal risks in Britain under a regulatory redress scheme aimed at compensating drivers who claim they were mis-sold car financing. BNP’s came to €219mn, while Crédit Agricole’s was €17mn.
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