# BNP Paribas first-quarter revenue beats as trading outperforms Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-05-03 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: BNP Paribas First-Quarter Revenue Beats Expectations Meta Description: Discover how BNP Paribas exceeded sales projections with strong trading performance and capital gains from asset divestments. URL: https://financedigest.com/bnp-paribas-first-quarter-revenue-beats-as-trading-outperformshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-05-03t053957z1lynxmpej4204frtroptp4global-banks-bnp-paribas-1736814074752-compressed.jpg) # BNP Paribas first-quarter revenue beats as trading outperforms By Mathieu Rosemain and Matthieu Protard PARIS (Reuters) -BNP Paribas’s first-quarter sales beat market expectations as trading business at the eurozone’s biggest bank outperformed most of its peers, while it started to reap the benefits from rising interest rates. BNP’s quarterly profit more than double in the first quarter from a year earlier, bolstered by gains from its much-anticipated sale of its U.S. retail division, allowing the [bank to beef up its capital](https://www.financedigest.com/bank-of-england-consults-on-remaining-basel-bank-capital-rules.html "Bank of England consults on remaining Basel bank capital rules") and liquidity buffers, at a time when European lenders strive to restore confidence in a sector battered by turmoil. Revenue of just over 12 billion euros ($13.20 billion) in the [period exceeded the company’s compiled consensus of 11.7 billion as net interest income ticked higher in the usually difficult French retail market](https://www.financedigest.com/innovation-at-periodic-intervals-to-upscale-the-linear-accelerator-market.html "Innovation at periodic intervals to upscale the Linear Accelerator Market"), the bank said on Wednesday. Analysts at Deutsche [Bank called BNP’s quarterly report](https://www.financedigest.com/board-report-highlights-complex-decision-making-process-across-banking-and-finance-sector.html "Board Report Highlights Complex Decision-Making Process Across Banking and Finance sector") “solid. These results prove the resilience and diversification of BNP and should be [received](https://www.financedigest.com/automotive-camshaft-market-to-receive-overwhelming-hike-in-revenues-by-2027-tmr-insights.html "Automotive Camshaft Market to Receive Overwhelming Hike in Revenues by 2027 | TMR Insights") well by the market in our view,” they said before market open. Royal [Bank of Canada analysts said the results pointed to a strong performance](https://www.financedigest.com/how-digital-innovation-in-challenger-banks-encourages-legacy-banks-to-perform-better.html "How digital innovation in challenger banks encourages legacy banks to perform better") at BNP’s trading arm and good cost control. In securities trading, revenue edged down 1.8% but still performed better than some peers including [Deutsche Bank](https://www.financedigest.com/citigroup-to-buy-deutsche-bank-license-in-mexico-for-wholesale-unit.html "Citigroup to buy Deutsche Bank license in Mexico for wholesale unit"), which saw fixed-income trading decline by 17% in the first quarter. At U.S. bank Goldman Sachs, first-quarter sales from fixed income, currency and commodities (FICC) trading, usually a [bright spot](https://www.financedigest.com/stanchart-sees-asia-middle-east-as-bright-spots-in-weak-global-economy.html "StanChart sees Asia, Middle East as bright spots in weak global economy"), plunged 17% to $3.93 billion, while equity trading revenue sank 7% to $3.02 billion. BNP’s FICC trading over the period was up 9%. The [sale of Bank of the West](https://www.financedigest.com/ben-jerrys-loses-bid-to-halt-sales-in-west-bank.html "Ben & Jerry’s loses bid to halt sales in West Bank"), which closed in February, yielded about 2.95 billion euros ($3.25 billion) in capital gains, the French lender said, helping BNP Paribas shore up its CET 1 ratio – a key measure of financial strength – to 13.6%, up from 12.3% in the previous quarter. The first quarter net income, group [share amounted to 4.44 billion](https://www.financedigest.com/softbanks-vision-fund-posts-2-billion-profit-share-weakness-casts-shadow.html "SoftBank’s Vision Fund posts billion profit, share weakness casts shadow") euros, in line with expectations, and up from 1.84 billion a year earlier. The group’s liquidity ratio was also up by 10 percentage points over the same period, to 139%, while the cost of risk — money put aside for failing loans — stood lower than expected at 642 [millions euros](https://www.financedigest.com/sp-global-fined-1-1-million-euros-for-premature-credit-rating-publications.html "S&P Global fined 1.1 million euros for premature credit rating publications"). ## INTEREST INCOME UP BNP’s first-quarter sales were up by 1.4% from a year earlier to 12.03 billion euros, driven by its investment [bank and its commercial and retail branch](https://www.financedigest.com/the-future-role-of-bank-branches.html "The Future Role of Bank Branches"). The group’s [global markets](https://www.financedigest.com/global-banana-flour-market-to-reach-us-735-mn-by-2027.html "Global Banana Flour Market to reach US$ 735 Mn by 2027") division, which bolstered BNP’s results in 2022, saw its sales edge down by 1.8%, in spite of continued growth in FICC trading (fixed income, commodities, currencies). BNP’s commercial and retail banking’s sales in France grew faster than expenses in the first quarter, driven by the rise in interest [rates charged on mortgages following tighter monetary policy](https://www.financedigest.com/key-fed-official-sees-rates-liftoff-in-2023-as-policy-debate-heats-up.html "Key Fed official sees rates liftoff in 2023 as policy debate heats up"). French banks usually lag behind their [German and Italian peers because of stringent regulations](https://www.financedigest.com/german-regulator-stays-vigilant-as-meta-changes-vr-headset-rules.html "German regulator stays vigilant as Meta changes VR headset rules") that cap the rates at which lenders provide mortgages, which are mostly on a fixed rate basis. BNP’s operating expenses also jumped 23% in the first quarter from the previous quarter, notably propelled by a nearly 900 million-euro contribution to the Single Resolution Fund, an industry-funded [safety net](https://www.financedigest.com/ecb-weighs-bigger-rate-hike-with-safety-net-for-indebted-countries.html "ECB weighs bigger rate hike with safety net for indebted countries"). Restructuring costs worth 236 [million euros](https://www.financedigest.com/spains-king-felipe-reveals-2-6-million-euros-in-wealth-in-bid-to-make-royal-house-more-transparent.html "Spain’s King Felipe reveals 2.6 million euros in wealth in bid to make Royal House more transparent") at BNP Paribas’ consumer finance division, where it is cutting 921 positions through voluntary departures and internal mobility, also weighed on expenses. BNP Paribas said it was on track to deliver [“strong growth” in 2023 distributable earnings](https://www.financedigest.com/strong-earnings-dividend-bonanza-push-ftse-100-higher.html "Strong earnings, dividend bonanza push FTSE 100 higher") per share. It confirmed its 2025 targets, including a return on tangible equity (ROTE) of around 12% by 2025 and an [average annual](https://www.financedigest.com/average-annual-uk-grocery-bill-highest-since-at-least-2008-industry-data.html "Average annual UK grocery bill highest since at least 2008 -industry data") growth in net income of more than 9% between 2022 and 2025. Its 5 billion-euro share [buyback programme](https://www.financedigest.com/ubs-makes-changes-to-buyback-programme-following-credit-suisse-takeover.html "UBS makes changes to buyback programme following Credit Suisse takeover") will proceed as planned, it said. The first tranche of 2.5 billion euros was approved in March, a sign analysts deemed reassuring as it took place shortly after the collapse of [Credit Suisse](https://www.financedigest.com/credit-suisse-to-repay-further-750-million-to-greensill-linked-fund-investors.html "Credit Suisse to repay further 0 million to Greensill-linked fund investors"). ($1 = 0.9093 euros) (Reporting by Mathieu Rosemain and Matthieu Prottard; Editing by Ingrid Melander, Elisa Martinuzzi, Jacqueline Wong and Louise Heavens) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---