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BNP Paribas reports a 26% jump in net profit as retail banking rebounds

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BNP Paribas reports a 26% jump in net profit as retail banking rebounds

LONDON — BNP Paribas reported Friday a 26% annual jump in net profit for the 2d quarter of this year, beating market expectations.

The French bank said that net income reached 2.9 billion euros ($3.44 billion) over the three-month length ending June. In comparison, analysts had pointed to a 2.24 billion euro net income, according to Refinitiv.

Early Newspaper

BNP Paribas said that the latest outcomes benefited from a rebound in business activity, as economies relaxed some Covid-19 lockdown measures.

“There may be a pickup in the financial system, while you search at the quantity of card transactions, of corporate transactions, of digital transactions, they are really up. And so that basically means that volumes are up, credits are up, commissions are up, and all that basically fuels that [performance],” Lars Machenil, chief financial officer of BNP Paribas, advised CNBC.

The domestic markets division saw revenues rising by almost 10% from a year ago. On the varied hand, the investment banking unit reported almost a 10% fall in revenues.

The French lender justified the drop in investment banking revenues on the fact that its performance a year ago had been exceptionally high.

Speaking to CNBC’s Charlotte Reed, Machenil avoided singling out the unit’s performance in the quarter and said that “At BNP, we search at CIB (Corporate and Institutional Banking) as a total with all of the products and companies because every now and then there may be more demand for one than for the varied one.”

“Our overall corporate and institutional banking is steadily increasing,” he said.

Other highlights of the quarter:

  • Revenues reached 11.8 billion euros, flat from a year ago.
  • CET 1 ratio, a measure of bank solvency, stood at 12.9% vs. 12.8 in the outdated quarter.
  • Operating expenses have been down 2.3% from a year ago.

Additional dividend

BNP Paribas announced its plan to pay out an additional cash dividend of 1.55 euros per share. In May, the bank paid out a dividend of 1.11 euros per share.

Machenil described the latest quarter as “historic” while suggesting that the outlook for the bank this year can be greater than initially anticipated.

Shares of BNP Paribas are up 21% year-to-date.

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BNP Paribas reports a 26% jump in net profit as retail banking rebounds