PARIS (REUTERS) - BNP Paribas reported a 4.4 per cent rise in quarterly profit, topping analysts expectations, as a surge in fixed income and equities trading helped offset weak retail banking in home markets where revenue fell.
The results came after French banks enjoyed a stock market rally following the first round of the French presidential election that bolstered investors' projections that MR Emmanuel Macron, seen as a business-friendly candidate, would eventually win.
France's biggest bank said on Wednesday (May 3) that net income rose to €1.89 billion (S$2.88 billion) in the first quarter from €1.81 billion a year earlier. This beat the average of four analyst estimates of €1.6 billion in a Reuters poll.
BNP Paribas outperformed its European rivals in reporting a 33.1 per cent rise in its global markets division that includes debt and equities trading, comparing to a 4 per cent increase on average across peers, such as Deutsche Bank, Credit Suisse, Barclays and UBS, according to Reuters calculations.
BNP Paribas cited a "significant pick-up in client business compared to a very challenging market environment" a year ago, when a period of economic uncertainty and investor caution triggered volatility in financial markets.
"The CIB (corporate and institutional bank) rebounded strongly from a low base in the first quarter of last year," BNP Paribas chief executive Jean-Laurent Bonnafé said in a video interview on the bank's website.
US and European investment banks have benefited in the first quarter from a jump in markets-related revenue following US rate hikes, as well as from signs of an economic recovery in Europe and some progress in Britain's plans to leave the EU.
Fixed income, currency and commodities trading at BNP Paribas surged 32 per cent to €1.17 billion, compared to a 24 per cent rise in the business across the big five US banks, according to IFR calculations.
BNP Paribas also outpaced both European and US rivals in equities trading which rose 36 per cent versus a flat performance across the US banks on average, and compared to declines at Deutsche, Barclays and Credit Suisse.
BNP Paribas' international financial services division that includes retail banking outside European home markets, as well as personal finance, insurance and asset management, was the biggest contributor to the group's net profit this quarter with pre-tax income up 16 per cent to €1.2 billion.
France's biggest banks, BNP Paribas and Societe Generale, are reporting results this week just a few days before the May 7 French presidential runoff vote, where centrist Macron is facing far-right rival Marine Le Pen who has vowed to take France out of the euro currency and the EU if elected.
Opinion polls see Mr Macron beating Ms Le Pen in the final vote.