By Noemie Bisserbe
PARIS--French bank BNP Paribas SA (BNP.FR) said Thursday that
third-quarter net profit inched up, helped by lower costs, despite
a slide in investment banking revenue.
The Paris-based lender, Europe's third-largest listed bank by
assets, said net profit rose 2.4% to 1.36 billion euros ($1.87
billion) in the three months ended September, up from EUR1.33
billion a year earlier, beating analysts' forecasts of EUR1.23
billion.
Like most of its peers in Europe and in the U.S., BNP Paribas
was hit by a slump in fixed income trading due to market volatility
fueled by fears that the Fed may scale back on some of its efforts
to stimulate the economy and slower client activity.
Deutsche Bank AG (DB) said Tuesday that third-quarter net profit
plunged 94% to EUR41 million, as investment banking revenue slid,
while Credit Suisse Group AG's (CS) revenue fell in its
investment-banking and fixed-income-trading divisions. Earlier this
month, Citigroup Inc. (C) also posted disappointing results, hurt
by lower fixed income revenue.
BNP Paribas's investment banking revenue was down 15% at EUR2.03
billion in the third quarter, pushing overall revenue down 4.2% to
EUR9.29 billion.
Retail banking revenue fell by 3.4% to EUR5.95 billion, as
demand for new loans continued to shrink.
While the French bank has been able to address concerns over its
financial strength, it is yet to revive growth in the face of
strict new regulations and economic uncertainty.
The bank said earlier this year that it was working on a new
strategic plan for 2014 through 2016. As part of that plan, the
bank said it would increase its presence in the Asia-Pacific region
and in Germany and develop its asset management business
globally.
In a conference call with reporters, Chief Operating Officer
Philippe Bordenave said the bank was still working on its strategic
plan and that "no acquisition is in the works." Recent media
reports suggested that BNP Paribas was interested in strengthening
its presence in Poland through the acquisition of Bank Gospodarki
Zywnosciowej (BGZ.WA), Rabobank's Polish unit.
Even as it forges ahead with its expansion plans, BNP Paribas
aims to cut its overall annual costs by EUR2 billion by 2015. The
bank said Thursday that it had already cut annual expenses by
EUR549 million in the first nine months of the year, notably
through early retirement plans in Italy and Belgium and lower IT
costs.
The bank's core tier one ratio, a key measure of a bank's
financial health, stood at 10.8% at the end of September.
Its leverage ratio, which compares capital to total assets,
stood at 3.8% in September, above the 3% threshold set by
regulators for 2018.
BNP Paribas is the first major French bank to report
third-quarter earnings. Societe Generale SA (GLE.FR) and Credit
Agricole SA (ACA.FR) publish their results on Nov. 7.
Write to Noemie Bisserbe at noemie.bisserbe@wsj.com
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