BNP Paribas SA (BNPQY) shares were active in early Paris trading after France's biggest bank posted stronger-than-expected first quarter earnings amid a surge in revenues from its global markets division.
BNP said net income for the first three months of the year rose 4.4% to €1.89 billion, beating the consensus forecast of €1.6 billion despite weaknesses in its domestic retail market. However, investors focused on a 33% rise in revenues from trading at its global markets division, to €1.754 billion, a figure that was significantly higher than those posted by its European rivals. For the entire Corporate and Investment Banking division, revenues rose 20% €3.223 billion, outpacing the 11% increase (to €2.5 billion) in operating expenses.
"BNP Paribas delivered a very good performance this quarter," said CEO Jean-Laurent Bonnafe. "The revenues of the operating divisions were significantly higher thanks to good business growth. Costs were well under control and the cost of risk was down."
"The Group's balance sheet is rock-solid and the further increase in the fully loaded Basel 3 common equity Tier 1 ratio to 11.6% testifies this," he added. "I would like to thank all the employees of the Group whose dedicated work made these results possible, allowing to start the 2020 plan in good conditions."
BNP also said its tier 1 capital ratio, a measure of the amount of cash the bank must set aside to cover potential losses, rose by one percentage point from the end of 2016 to 11.6% at the end of March. That trails the 14.1% figure posted by Deutsche Bank DB last month, although that tally includes the bank's $8.5 billion capital increase.
BNP was marked 0.65% higher at €66.18 each by 14:20 CET in Paris, a gain that ran against a broader 0.23% decline for the CAC-40 benchmark.
So far this year, BNP shares have been one of the best performers among the region's biggest lenders -- trailing only Banco Santander SA (SAN) -- and have risen more than 8.6% compared to an 8.4% gain for the Stoxx Europe 600 Banks index.