Reliability Pays for BNP Paribas Investors -- Heard on the Street
May 03 2017 - 7:19AM
Dow Jones News
By Paul J. Davies
France's biggest bank is polishing its reputation as one of
Europe's most reliable. BNP Paribas said first-quarter profit was
up 4% Wednesday, driven partly by the best recovery in investment
banking and securities trading revenue seen among European banks so
far.
BNP Paribas almost doubled pretax profit in its corporate and
investment banking arm despite higher costs as better revenue meant
more money for banker bonuses. Its domestic retail and
international retail and commercial businesses also saw decent
revenue growth with more limited cost increases.
Other big European, Swiss and British banks have reported a good
revenue recovery in their investment bank and markets businesses in
their local currencies. However, the strengthening dollar over the
past year has meant their numbers looked less impressive in dollar
terms.
BNP Paribas now leads the European pack with 15% revenue growth
across its investment banking businesses compared with the first
quarter of 2016 in dollar terms ahead of Credit Suisse at slightly
more than 10%. BNP Paribas' bond, rates and currencies trading
revenue recovery was in line with the Swiss bank, but it did better
in other areas. In equities trading and hedge-fund services, it is
the only European bank so far to have achieved strong growth. It
also outgrew U.S. rivals here.
This is promising because the bank has pledged to grow revenue
and take market share in investment banking to hit higher return
targets in this business under its strategic plan set out in
February.
Its promise of group level returns on equity of 10% isn't
spectacular but does look likely to be met. With France's next
president looking likely to be less disruptive than feared last
month as well, BNP Paribas' share price rebound should eliminate
more of its 14% discount to forward book value.
Write to Paul J. Davies at paul.davies@wsj.com
(END) Dow Jones Newswires
May 03, 2017 08:04 ET (12:04 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
BNP Paribas (EU:BNP)
Historical Stock Chart
From Mar 2024 to Apr 2024
BNP Paribas (EU:BNP)
Historical Stock Chart
From Apr 2023 to Apr 2024