France’s BNP Paribas beats earnings forecasts on bumper trading revenue

By Matthieu Protard

PARIS – French bank BNP Paribas posted a better than expected 19% rise in net income in the first quarter as trading boomed and reaffirmed its medium-term profitability targets, sending its shares higher.

France’s biggest listed lender said on Tuesday that net profit reached 2.11 billion euros ($2.22 billion) as trading revenues surged and it slashed charges for bad debt, though costs were higher than market forecasts.

“BNP Paribas had a massive earnings beat, driven in particular by strong revenues”, analysts at Jefferies said in a note. “The revenue beat is largely thanks to markets”, they added.

Shares rose 2.4% in early trading, having lost nearly 20% since the start of the year on concerns about the economic spillover effects from the conflict in Ukraine, including the shock to commodities prices. Shares were up 41% in 2021.

BNP‘s revenue in fixed-income, currency and commodities trading rose by 47.9% in the first quarter, while equity trading revenue soared 60.9%.

The bank also reaffirmed plans to return 60% of net income to investors through 2025 compared to 50% previously. It has targeted a return on tangible equity — a key measure of profitability — of more than 11% by 2025, up from 10% last year.

It stuck to the target despite booking a 159 million euro impairment on its 60% stake in Ukrainian lender Ukrsibbank, which has 5,000 staff and 230 branches across the country.

($1 = 0.9520 euros)