BNP Paribas 1Q Net Profit Rose 22% -- Earnings Review

By Pietro Lombardi

BNP Paribas SA (BNP.FR) reported results for the first quarter on Thursday. Here's what you need to know:

NET PROFIT: France's largest listed bank by assets reported a 22% increase in net profit to 1.92 billion euros ($2.15 billion). This compares with analysts' expectations of EUR1.99 billion, according to a consensus forecast provided by FactSet.

REVENUE: Revenue increased 3.2% on year to EUR11.14 billion, beating expectations of EUR10.74 billion.

WHAT WE WATCHED:

-DISPOSALS: Capital gain on the sale of 14.3% of SBI Life Insurance Co. (540719.BY)--BNP's Indian joint venture with the State Bank of India--boosted the bottom line.

-INVESTMENT BANK: An unexpected strong performance of its fixed-income business supported the bank's results. BNP's fixed-income revenue jumped roughly 29%, supported by a strong performance in rates and foreign-exchange transactions. Equity revenue, however, was down about 30%. Revenue at the corporate and institutional banking division was up 3.5%. The unit "recorded this quarter an upturn in client activity despite a still lackluster market context at the beginning of the quarter," the bank said.

-DIVISIONAL PERFORMANCE: The low interest-rate environment weighed on the bank's domestic-markets division, whose revenue declined slightly. The international financial-services unit, which includes wealth management, consumer finance and insurance, posted a 9.5% growth in revenue. "These results showed better than expected CIB results (mainly in fixed income), resilient domestic market (excluding Italy), strong insurance that more than offset weaker BancWest and wealth management," Citi said.

-CAPITAL: "The negative comes from capital," Goldman Sachs said. BNP's core Tier 1 capital ratio--a key measure of capital strength--slipped to 11.7% in March from 11.8% at the end of December.

Write to Pietro Lombardi at [e-mail]

(END) Dow Jones Newswires

May 02, 2019 03:58 ET (07:58 GMT)

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