BNP Paribas profit beats estimate as horrible loan provisions dip
Aug 01, 2022: -French bank BNP Paribas reported better-than-expected profit in the second quarter after bad loan provisions dipped despite the economic slowdown. Businesses stayed buoyant, especially in its investment banking division.
On Friday, France’s biggest-listed lender declared its net income rose 9.1% to 3.18 billion euros yearly. At the same time, an informal consensus among analysts showed net income at only about 2.70 billion euros.
Across the group, revenue increased 8.5% to 12.78 billion euros, and faster-than-operating expenses increased 7.6% to 7.72 billion euros.
The cost of risk, reflecting the money set aside for failing loans, stood at 789 million euros, about 100 million below average expectations. At the same time, the bank stressed its “prudent risk management” statement.
Activity increased across business lines, with the unit home to retail banking up 11.1%, while investment banking showed a 10.6% increase.
BNP’s revenue in fixed-income, currency, and commodities trading grew by 14.8% in the second quarter, while equity trading revenue which gains 16.1%.
French bank shares have underperformed European banks so far in 2022, which loses about 26.5% of their value, which is against 22% for the sector’s index.
European banks this week offered flashes of which surprises good news on profits, with investors on guard for signs that a weaker economy, that grew inflation, and the war in Ukraine could reach their outlook.
Deutsche Bank posted a better-than-expected 51% increase in second-quarter profit as investment banking revenues increased. In contrast, UBS posted a smaller-than-expected quarterly profit as turmoil in financial markets hurt its wealth management businesses.
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