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.
On Wednesday, France's largest bank, BNP Paribas, disclosed a net income of €3.46 billion for the third quarter, marking a 13.5% increase compared to the previous year and beating analysts' average expectation of €3.23 billion. A significant contributor to this boost was the 50% surge in equities trading revenue. In response to its fiscal crisis, BNP pledged to repurchase €1.3 billion of its shares starting November.
Despite this, the bank emphasized that its exposure to France's financial troubles remained limited. Revenue for the quarter rose by 9.5% to €13.76 billion, primarily fueled by the corporate and institutional banking division, where earnings climbed 16.6% to €5.2 billion. Within this division, global markets revenue surged 21.9% to €2.67 billion, nearing a record set in the first quarter of the year.
The equity and prime services segment, encompassing trading shares and services for hedge funds, generated €1.46 billion, a substantial 50% increase. Fixed income, currencies, and commodities trading remained steady at €1.22 billion, as gains in Asia and foreign exchange markets offset weaker credit and interest rate businesses.
CEO Jean-Laurent Bonnafé highlighted a strong third quarter driven by robust performance across all three divisions. Commercial and personal banking and services division revenue grew 3.6%, buoyed by favorable interest rates and increased fees, though car leasing faced challenges with a 29.1% revenue decline due to falling used-car prices.
The bank's risk reserves, set aside for potentially defaulted loans, increased to €964 million, slightly below its 2026 target of under 40 basis points. BNP Paribas' 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, driven by the sale of its Moroccan subsidiary BMCI.
The bank reaffirmed its targets through 2028, including a 12% return on tangible equity this year, with a projected increase above 13% in 2028. Its shares saw a slight dip of about 1.5% at the opening of the Paris market on Wednesday. The results came amid France's political and fiscal crisis, with French 10-year government bond yields exceeding 5% for the first time since 2002 due to a divided parliament's struggle to pass the budget amid nationwide protests.
BNP Paribas holds around €19 billion in French government bonds, with €16 billion booked at amortized cost, meaning a potential 0.5% increase in the yield gap between French and German bonds would only marginally impact its CET1 ratio. France's contribution to BNP's pre-tax income in 2025 was under 10%, a significant reduction from half of the share in 2016, indicating the bank's substantial diversification away from the French market in recent years.
Written by urgent.news from Euronews's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
