France’s BNP Paribas beats earnings forecasts on bumper trading

Shares jump almost 5% as bank reaffirms plans to return 60% of net income to investors

French bank BNP Paribas posted a better than expected 19 per cent rise in net income in the first quarter as trading boomed and reaffirmed its medium-term profitability targets, sending its shares higher.

France’s biggest listed lender said on Tuesday that net profit reached €2.11 billion as trading revenues surged and it slashed charges for bad debt, though costs were higher than market forecasts.

“BNP Paribas had a massive earnings beat, driven in particular by strong revenues,” analysts at Jefferies said in a note. “The revenue beat is largely thanks to markets,” they added.

Ukraine

Shares rose almost 5 per cent, having lost nearly 20 per cent since the start of the year on concerns about the economic spillover effects from the conflict in Ukraine, including the shock to commodities prices.

BNP’s revenue in fixed-income, currency and commodities trading rose by 47.9 per cent in the first quarter, while equity trading revenue soared 60.9 per cent.

The bank also reaffirmed plans to return 60 per cent of net income to investors through 2025 compared to 50 per cent previously. It has targeted a return on tangible equity – a key measure of profitability – of more than 11 per cent by 2025, up from 10 per cent last year.

It stuck to the target despite booking a €159 million impairment on its 60 per cent stake in Ukrainian lender Ukrsibbank, which has 5,000 staff and 230 branches across the country. – Reuters