*
Net profit up 10.3% in Q3
*
Revenues up 8% in Q3
*
€2 billion in additional revenue expected by 2025 with the interest margin
(Updated with stock price and new analyst commentary)
PARIS, Nov 3 (Reuters) – BNP Paribas on Thursday reported better-than-expected third-quarter results, boosted by its market activities, and said it expected to benefit from the environment of rising interest rates.
The first bank in the euro zone indicates that it posted net profit in the quarter up 10.3% to 2.76 billion euros, where analysts expected an average of 2.36 billion, according to the Refinitiv consensus.
Over the period, its revenues grew by 8% while its expenses increased by 6%.
The bank also indicated that with the rise in interest rates, it expected a surplus of around two billion euros in income by 2025 with the growth of the interest margin.
On the stock market, the BNP Paribas share benefited from these announcements. At 10:40 a.m., the title gained 2.66% to 49.14 euros.
For RBC analysts, BNP Paribas exceeded expectations in most of its businesses over the quarter.
They note however in a research note that the financial solvency ratio CET1, “common equity tier one”, at 12.1% is below expectations but that the sale of the American subsidiary Bank of the West will allow the group to improve its solvency.
Jefferies analysts also point out that the prospect of 2 billion euros in additional revenue by 2025 is good news.
In market activities, BNP Paribas said it benefited from the dynamism of its activities in commodity derivatives and in the interest rate and foreign exchange markets. Revenues there climbed 14.7%.
On the other hand, in financing, its Global Banking division saw its revenues fall by nearly 8%.
“In an unfavorable environment, Global Banking’s revenues (..) were impacted this quarter by revaluations of unsold leveraged finance syndication positions,” the bank said in a statement.
In Europe, banks such as Britain’s HSBC, Germany’s Deutsche Bank and Italy’s UniCredit reported strong third-quarter results, driven by higher trading revenue and increase in credit costs in the context of rate hikes by central banks to combat inflationary pressures.
Nevertheless, this tightening of monetary policies and the turmoil on the financial markets have forced banks to keep credit instruments in their accounts for a longer period than expected. (Report Silvia Aloisi and Matthieu Protard, edited by Camille Raynaud and Sophie Louet)