By Elena Vardon
BNP Paribas reported a rise in its third-quarter earnings that was in line with market expectations as growth in its investment bank offset softness in its domestic retail business.
The French lender on Thursday said its net profit for the three months ended Sept. 30 grew 5.9% from a year earlier to 2.87 billion euros, equivalent to $3.12 billion. That compared with the estimate of 2.86 billion euros taken from a company-compiled consensus.
Its revenue came in at 11.94 billion euros, roughly in line with expectations of 11.93 billion euros and up 2.7% from the year-ago period.
Its corporate and institutional banking division--which the group is betting on to gain market share and drive growth--posted a 9.0% revenue increase to 4.25 billion euros, boosted by higher trading revenues in its global markets business.
For its retail business, BNP Paribas reported a 2.6% revenue drop to 6.58 billion euros due to the normalization of used-car prices at its vehicle leasing company Arval. Net interest income--the difference between what it earns on loans and what it pays clients for deposits--held up and fees saw some improvements in the quarter across its European markets, it added.
"Our Commercial & Personal Banking is likely to gradually benefit from the positive shift in the rate environment," Chief Executive Jean-Laurent Bonnafe said.
The bank's division that houses insurance and asset-management brought in 1.49 billion euros in quarterly revenue, 4.9% ahead of the previous year, it said. Management has been beefing up these business lines 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.
In July, BNP Paribas entered exclusive talks to buy the investment-management arm of insurer AXA and reach a long-term partnership for 5.1 billion euros. Last month, the bank also announced its acquisition of HSBC's private banking activities in Germany.
Through these transactions, BNP Paribas remains focused on the strategic repositioning of this division-Investment & Protection Services-within the group, Bonnafe added.
The Paris-based group confirmed its targets for 2024, which include 2% growth on distributable revenue of 46.9 billion euros in 2023 and net profit topping the previous year's 11.2 billion euros.
Its common equity Tier 1 ratio--a key measure of balance sheet strength--stood at 12.7% at the end of the period, above its 12% target.
Write to Elena Vardon at elena.vardon@wsj.com
(END) Dow Jones Newswires
October 31, 2024 02:36 ET (06:36 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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