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BNP Paribas Q3 net income drops 4% amid trading revenue contraction

EditorRachael Rajan
Published 10/27/2023, 05:34 AM
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BNP Paribas (OTC:BNPQY) has reported a 4% drop in Q3 net income to 2.66 billion euros ($2.81 billion), matching analyst estimates. This comes despite a 4% rise in group sales to 11.58 billion euros, driven by growth in the bank's corporate financing services. The shift from U.S. commercial lending to global investment banking under CEO Jean-Laurent Bonnafe has proved beneficial amidst market fluctuations.

However, the bank also reported a more than 9% fall in overall trading revenue, due to decreased client activity. This included a significant 14.3% decline in fixed income, currencies, and commodities sales. Despite these challenges, BNP Paribas' global banking business saw a Q3 sales increase of 20%.

The bank reserved 734 million euros for credit losses, less than the expected 815 million euros, and achieved a return on tangible equity (ROTE) of 12.7%, moving closer to its 12% target by 2025. Under Bonnafe's leadership, over 85% of the bank's 5 billion-euro share buyback program has been executed.

However, the results were not well-received on the Paris stock exchange, leading to a temporary 5% drop in BNP shares. The bank's consumer credit operation, Cetelem, which is currently undergoing restructuring and job cuts, contributed just 197 million euros to pre-tax profits—a 42% fall from last year—and represented over half of BNP's provisioned risky loans of 734 million euros, exerting further pressure on the bottom line.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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