PARIS: BNP Paribas has reported a forecast-beating 9% rise in first-quarter (1Q) profit thanks to its retail bank, after its investment bankers and traders failed to capitalise on market turbulence caused by the war in Iran.
The eurozone’s largest bank by assets also struck a note of caution by setting aside more cash against heightened uncertainty linked to the war – one of several European lenders to do the same this week.
BNP’s net income in the January-to-March period rose 9% year-on-year to 3.22bil, comfortably above the 2.93bil average of 14 analyst estimates.
Revenues increased 8.5% to 14.1bil, also exceeding expectations.
The French lender’s investment bank trailed peers. Unlike Wall Street heavyweights and Swiss rival UBS , which posted their strongest trading quarters in years, BNP reported a more modest 2.5% rise in trading revenues, with fixed income, currencies and commodities broadly stable.
BNP’s investment banking overall revenue edged down just 0.8%, partly reflecting the impact of a weaker dollar.
Activity in its global banking division, which serves corporate, institutional and financial clients, fell by close to 10%, with the bank saying the geopolitical situation delayed some transactions in March.
BNP chief executive officer, Jean-Laurent Bonnafe, who has led the group since 2011, has gradually turned investment banking into a key growth engine alongside retail banking, insurance and asset management. That universal model has helped position BNP as one of Europe’s leading investment banks.
But it also brings greater operational complexity and higher costs at a time when Wall Street rivals are benefiting from lighter regulation and deeper capital markets.
In the retail unit, momentum remained strong, supported by improving net interest margins in France and Belgium.
BNP shares, which fell after an October 2025 United States court ruling linked to a Sudan-related case, have since rebounded after the bank pledged to lift its common equity tier 1 or CET1 capital ratio to 13% by 2027, a target it reiterated. The ratio stood at 12.8% at end-March.
The bank hiked its provisions for credit losses to 922mil in the quarter from 766mil over the same period last year, to cover macroeconomic uncertainty tied to the Middle East – a cautious stance also seen at Deutsche Bank and Lloyds this week. — Reuters
