BNP Paribas downplays French debt exposure as stock trading lifts profit
The French multinational bank BNP Paribas beat profit forecasts in the third quarter as revenue from equities trading surged 50%, and announced a €1.3 billion share buyback while playing down its exposure to French debt.
BNP Paribas reported a net income of €3.46 billion in the third quarter, marking a 13.5% increase from the previous year and exceeding analysts' expectations of €3.23 billion. The bank's stock trading revenue surged by 50%, leading to the profit beat. BNP Paribas plans to repurchase €1.3 billion of its own shares. Although the bank's exposure to France's fiscal crisis is limited, it holds around €19 billion of French government bonds.
BNP Paribas' CEO, Jean-Laurent Bonnafé, attributed the strong performance to the operating results across all three divisions. Revenue from corporate and institutional banking services rose 16.6%, while equity and prime services revenue increased by 50%. Fixed income, currencies, and commodities trading remained flat. The bank's Common Equity Tier 1 (CET1) ratio, a key indicator of financial strength, stood at 12.9% at the end of September and is expected to surpass 13% by year-end.
BNP Paribas has set targets through 2028, with a 12% return on tangible equity this year and above 13% in 2028. The results come during France's political and fiscal crisis, with the yield on French 10-year government bonds surpassing 5% for the first time since 2002.
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