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BNP Paribas (OTC:) has reported a 4% drop in Q3 net income to 2.66 billion euros ($2.81 billion), matching analyst estimates. This comes despite a 4% rise in group sales to 11.58 billion euros, driven by growth in the bank’s corporate financing services. The shift from U.S. commercial lending to global investment banking under CEO Jean-Laurent Bonnafe has proved beneficial amidst market fluctuations.
However, the bank also reported a more than 9% fall in overall trading revenue, due to decreased client activity. This included a significant 14.3% decline in fixed income, currencies, and commodities sales. Despite these challenges, BNP Paribas’ global banking business saw a Q3 sales increase of 20%.
The bank reserved 734 million euros for credit losses, less than the expected 815 million euros, and achieved a return on tangible equity (ROTE) of 12.7%, moving closer to its 12% target by 2025. Under Bonnafe’s leadership, over 85% of the bank’s 5 billion-euro share buyback program has been executed.
However, the results were not well-received on the Paris stock exchange, leading to a temporary 5% drop in BNP shares. The bank’s consumer credit operation, Cetelem, which is currently undergoing restructuring and job cuts, contributed just 197 million euros to pre-tax profits—a 42% fall from last year—and represented over half of BNP’s provisioned risky loans of 734 million euros, exerting further pressure on the bottom line.
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