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BNP Paribas gets a boost from equity trading as net profit rises 11%

People walk past BNP Paribas, a french international banking group.

ANGELA WEISS | AFP | Getty Images

LONDON — BNP Paribas reported on Friday first-quarter net income of 1.8 billion euros ($2.18 billion) — an 11% increase from the previous quarter.

Analysts had forecast a net income of 1.2 billion euros for the quarter, according to Refinitiv.

The French bank reported strong results from its investment banking division, where revenues were up almost 25% from a year ago.

Its said its equity and prime services’ businesses were especially strong, seeing a “record level” of activity and a rebound in derivatives trading.

“It’s a quarter where basically all lights are green,” Lars Machenil, CFO of BNP Paribas, told CNBC’s Charlotte Reed Friday.

“We’ve basically been raising more than 100 billion euros in financing. And this is a level of activity, which is better than what we saw in 2020 — it’s even better than what we saw in 2019. So that is quite good,” Machenil added.

Other highlights for the quarter:

  • Revenues hit 11.8 billion euros versus 10.8 billion at the end of 2020.
  • Operating expenses rose 13.7% from the previous quarter.
  • CET 1 ratio, a measure of bank solvency, stood at 12.8% unchanged from the previous quarter.

Revenue from fixed income, currencies and commodities trading fell, however, by almost 16% from a year ago

“The fixed income part, when it comes to rates, is a bit lower compared to the high level a year ago, but then the equities are … doing very well. So we see that our CIB (corporate and institutional banking) as a whole, as a diversified approach, is really growing on all cylinders, and growing quarter after the quarter,” Machenil stressed.

The French bank expects the European economy to pick up in the coming months and rebound strongly in the third quarter. However, given the strong performance of the bank in the first three months of the year, Machenil said the economic recovery could actually be “a tad better than what we anticipated.”

Shares of BNP Paribas are up about 23% year-to-date.

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