BNP Paribas, France's biggest bank by market capitalisation, posted first-quarter profits well ahead of forecasts, helped by higher earnings at its retail and investment banking operations.
Net profit fell 21 per cent from a year ago to €1.56 billion ($2.1 billion).
However, the result showed a recovery from BNP's fourth-quarter net loss of €1.37 billion and beat an average Reuters forecast for a net profit of €784 million.
Pretax profit at BNP's corporate and investment banking division rose nearly four times from last year to €1.23 billion, driven by a strong performance at the bank's fixed income division.
“Thanks to fixed income, it was a positive quarter for the bank and BNP's French retail division was also resilient,” said WestLB analyst Christoph Bossmann, who kept an “add” rating on BNP Paribas.
The bank's Tier 1 Ratio improved to 8.8 per cent at the end of the first quarter from 7.8 per cent at the end of December.
The stock has soared 49 percent since the start of the year, outpacing the DJ Stoxx bank index's 19 percent gain over the period.
“The real story here is that the results were driven by one division, and one division alone: fixed income," one Paris-based broker said.
“Don't be fooled by headlines - poor quality figures,” the broker said.
The outlook for the global banking sector remains uncertain, in spite of a recent rebound in markets.
JPMorgan and Credit Suisse both reported better-than-expected first-quarter profits last month, although Morgan Stanley and UBS posted losses..
BNP Paribas chief executive Baudouin Prot told BFM radio station that the economic recession would lead to more writedowns in the near future and that the British and American banks had not yet fully recovered from the credit crisis.
Reuters