BNP Paribas is scheduled to report results for the third quarter on Wednesday. Here is what you need to know.
REVENUE FORECAST: The French bank's revenue is estimated to come in at 13.50 billion euros ($15.12 billion), according to a company-compiled consensus calculated from 14 analysts' estimates, up from 12.57 billion euros a year prior.
NET PROFIT FORECAST: The Paris-based company is expected to report 3.23 billion euros in net profit for the quarter, up from 3.04 billion euros.
Shares in BNP Paribas fell 7.0% in the third quarter, and have fallen a further 9.6% since the quarter-end. However, the stock is up 4.8% since the start of the year.
WHAT TO WATCH
-- FRENCH SOVEREIGN SPREADS: French banks have underperformed the wider sector as French sovereign spreads widen against a challenging geopolitical and market backdrop, J.P. Morgan's Delphine Lee and Kian Abouhossein write in a note. First-order balance sheet transmission from a wider French bond spread seems to be limited, but second-order risks could come via deposit mix if inflation and rates rise. "The bigger swing factors are macro and policy: tighter conditions could pressure asset quality, while an ambitious-socially fraught-fiscal consolidation keeps tax headlines in play," JPM writes. French spreads are likely to stay volatile, so BNP's response to this will receive attention from investors.
-- COMMERCIAL BANKING: BNP's commercial banking and trading performance for the third quarter should benefit from recent macroeconomic volatility, Keefe, Bruyette and Woods analysts write. "While we see limited scope for capital surprises or earnings upgrades, an absence of credit surprises, continued progress towards targets and reassurance on the outlook could be enough to support the shares on the day," the analysts add. KBW says it expects a "reasonable" set of results from BNP.
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