BNP Paribas posted a stronger-than-expected third-quarter profit, fueled by a sharp increase in equity trading revenue that offset weakness in fixed income. The French bank's net income rose 5.8% year-on-year to €2.87 billion, beating the €2.64 billion average analyst estimate compiled by the bank.
Equity Trading Drives Revenue Growth
Revenue from equity and prime services surged 43% to €722 million, as the bank benefited from heightened client activity and market volatility. This strong performance helped lift overall group revenue by 1.7% to €11.6 billion, despite a 5% decline in fixed income, currencies and commodities (FICC) trading, which fell to €1.39 billion.
According to the bank, the equity trading boost was partly due to a favorable comparison with a weak third quarter in 2022, when markets were disrupted by geopolitical tensions and rising interest rates.
Cost Controls and Provisions
BNP Paribas continued to keep costs in check, with operating expenses rising just 0.5% to €7.8 billion. The cost-to-income ratio improved to 67.4% from 68.5% a year earlier. Provisions for bad loans increased to €781 million from €757 million, but remained below the levels seen in the pandemic.
“The group continues to execute its strategic plan with discipline, generating solid revenue growth while maintaining strict cost control,” said CEO Jean-Laurent Bonnafé in a statement.
Outlook and Capital Position
BNP Paribas maintained its full-year targets, including net income growth of more than 9% compared with 2022. The bank's CET1 ratio, a key measure of capital strength, stood at 13.2%, above the regulatory requirement.
The results contrast with some US rivals that reported weaker investment banking revenues. BNP's performance was also supported by its retail banking operations, which saw a 3% rise in revenue to €4.4 billion, driven by higher interest rates in France and Italy.
