PARIS (Agefi-Dow Jones) – The rebound in BNP Paribas’ activity was confirmed this summer in a context of economic recovery, which benefited most of the group’s businesses.
The bank published Friday net income up 32% in the third quarter, to 2.5 billion euros. Improving in the main divisions of the group, operating income also increased by 31% to 3.28 billion euros.
These performances include a reduction in provisions for bad debts due to the end of the health crisis. The cost of risk stood at 32 basis points of outstanding loans, against 57 basis points a year earlier.
Net banking income (NBI), the equivalent of turnover, increased by 4.7% over the period, to 11.4 billion euros, and also exceeded by 4.6% that of the third quarter of 2019 before the onset of the pandemic. The activity was driven by the growth of retail banking and asset management, BNP Paribas pointed out.
Analysts on average expected net income of 2.29 billion euros and GNP of 11.25 billion euros, according to FactSet.
At the end of this quarter, the group also announced the launch at the beginning of November of a share buyback plan of 900 million euros, which will strengthen the remuneration of shareholders after the additional dividend announced this summer in respect of fiscal year 2020.
The € 900 million share buyback program announced on Friday will only affect the capital position by around 10 basis points, which means that the group will maintain a strong loss absorbing capacity, Moody’s reacted in a note to its customers.
For the year as a whole, BNP Paribas has confirmed that it is counting on sustained growth in its income and on a low risk rate of less than 45 basis points.
Retail banking continues to rebound
The various businesses of the group benefited from the improvement in the economic situation between July and September, only insurance and investment banking interest rate products suffering from a drop in income.
The Domestic Markets division, which includes retail banking in France, posted growth of 6.3% despite low interest rates. Outstanding loans grew by 3% and deposits increased by 6.4%.
The insurance, asset management and financial services division (International Financial Services), on the other hand, saw its revenues fall by 3% (-1% at constant scope and exchange rates). “The sharp rise in income from asset management businesses is offset by a less favorable context in international retail banking networks and a lower contribution from Insurance and Personal Finance businesses,” the group said.
Corporate and investment banking (CIB) generated revenues up 6.4% over the quarter (+ 4.1% at constant scope and exchange rates). The division’s pre-tax profit improved by 39% to 1.33 billion euros. The activity was supported by investment banking (+ 15%), while market activities grew by 1.2% after a high basis of comparison in the third quarter of 2020. The only downside, the FICC branch ( Fixed Income, Currencies, and Commodities) contracted by 28% in a lackluster environment for fixed income products.
At the end of September, the CET1 solvency ratio stood at 13%, up 10 basis points from June.
On the Paris Stock Exchange, BNP Paribas shares gained 0.8% to 57.90 euros at 1:00 p.m.
-Thomas Varela, Agefi-Dow Jones; +331 41 27 47 99; [email protected] ed: LBO – ECH
Agefi-Dow Jones The financial newswire
Dow Jones Newswires
October 29, 2021 07:10 ET (11:10 GMT)
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