(BFM Bourse) – The La Défense bank recorded a net profit 50% higher than analysts’ expectations. It is also more optimistic about its cost/income ratio forecast for the current year.
For the time being, French banks are keeping in good shape and are not disappointing during this quarterly results season. BNP Paribas opened the ball in a good way on Thursday, which was welcomed by investors.
Its competitor Societe Generale is also on the right pace. The La Défense bank, which is preparing to change its general manager, unveiled this Friday “a set of robust financial indicators” for the third quarter, appreciates Barclays. This allows the action to gain 4.4% around 2 p.m. and to outperform the CAC 40, which appreciated by 2.6% at the same time.
The net profit of the establishment amounted to 1.5 billion euros, down 6.4% over one year. This indicator was notably penalized by the increase in the cost of risk, with provisions which amounted to 456 million euros, i.e. more than twice the amount for the same period of 2021.
In relation to outstanding loans, the cost of risk nevertheless remained at a relatively low level, at 31 basis points (0.31 percentage point) against 15 points a year ago.
Still, this net profit beat analysts’ expectations of 1 billion euros by 50%, underlines Royal Bank of Canada. The same is true for the cost of risk, which is 12% lower than the consensus, notes Barclays.
Compressed net margin in France
More generally, all of the group’s financial parameters proved to be above market expectations. Net banking income (NBI) – equivalent to turnover for banks – increased by 2.3% to 6.82 billion euros, 8% above the figure of 6.31 billion euros. euros expected by analysts.
The Jefferies bank also underlines the group’s performance on its costs, with adjusted management costs of 4.1 billion euros over the period, 1% lower than the consensus.
In France, in retail banking, the group managed to increase its income by 0.5% thanks to commissions, despite a decline in the net interest margin of 4.5%. This drop is due in particular to “the rise in the regulated savings rate (deliver A, LDD)” and to “a time lag effect of the rise in rates for new mortgages due to the wear rate”.
In France, since loans are at fixed rates, banks only gradually benefit from the rise in interest rates, until the stock of loans is gradually made up of new loans with higher rates. Unlike some countries, such as Eastern Europe or the United Kingdom, where the impact of interest rate increases on loans is much more direct, with the vast majority of loans at variable rates.
In terms of solvency, Societe Generale posted a CET 1 capital ratio of 13.1% at the end of September, again above the expectations of financial analysts.
On the strength of this robust quarter, the bank has revised its cost/income ratio forecast (a ratio which divides operating expenses by net banking income) now expecting a figure less than or equal to 64%, against a previous range comprised between 64% and 66% and an analyst consensus around 65%.
Crédit Agricole SA, the last of the three major listed French banks, will publish its quarterly accounts on November 10.
Julien Marion – ©2022 BFM Bourse
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