By Silvia Aloisi and Matthieu Protard
PARIS (Reuters) – BNP Paribas, the eurozone’s biggest lender, posted stronger-than-expected net profit in the third quarter, with buoyant trading revenue helping to offset rising costs and markdowns on some trading deals. leveraged finance.
Net profit for the three months to the end of September rose 10.3% year-on-year to 2.76 billion euros ($2.73 billion), from an average of 2.36 billion euros expected in a Refinitiv poll of analysts. Turnover increased by 8% to 12.3 billion euros.
This increase was driven by better than expected performance in France, Turkey and Poland. Earnings were also boosted by a 14.7% rise in global markets revenue as market volatility boosted trading in commodity derivatives, rates, currencies and emerging markets.
Equities and premium services, an area in which BNP has developed, also saw a slight increase in their revenues, helping to counter a drop in transactions and sales of equities.
BNP said it now expects rising interest rates to add 2 billion euros to its revenue by 2025. Its shares rose 1.2% at 09:00 GMT .
Hot markets and higher rates also had negative effects. BNP said investment banking revenue was hit by markdowns from unsold positions in leveraged finance as big lenders were forced to keep debt on their books longer than they needed to. would have liked and suffered losses on certain financial arrangements.
Operating expenses were up 6% year-on-year, due to the impact of restructuring and IT costs, while a 34% increase in the cost of risk – the money put from side for defaulting loans – was due to a one-time charge of 200 million euros in Poland, where a moratorium allowed borrowers to suspend certain mortgage payments.
BNP joined rivals such as HSBC, Deutsche Bank and UniCredit in reporting strong overall results for the quarter, helped by higher borrowing costs as central banks seek to tackle inflation.
French lenders traditionally take longer than their continental counterparts to reap the benefits of rising interest rates.
Indeed, more than 90% of French mortgages are at fixed rates, the rate of return on popular savings accounts is linked to inflation and the government limits the speed with which banks can reprice loans to customers.
Under pressure from the government, BNP Paribas and its competitor Societe Generale have also frozen their retail banking prices for 2023.
The French lender, which has a market value of 59 billion euros, also confirmed that it still plans to complete the sale of its Bank of the West US retail banking unit for $16 billion this year. He said he did not plan to buy another bank with the proceeds from the sale and would only use the money for small purchases and a €4 billion share buyback.
($1 = 1.0126 euros)
(Reporting by Silvia Aloisi and Matthieu Protard; Editing by Emelia Sithole-Matarise)