BNP Paribas, France’s largest bank by assets, reported first-quarter earnings in line with expectations, driven by strong performance in its investment banking division. However, the bank acknowledged a challenging economic environment, worsened by global trade tensions, but maintained its profit forecasts for the coming years.
The bank announced on Thursday that its group net income for the first quarter dropped by 4.9% compared to the same period last year, totaling €2.95 billion ($3.34 billion). This figure slightly exceeded the consensus estimate of €2.94 billion. The decline was largely attributed to the re-inclusion of BNP Paribas’ Ukrainian operations in its accounts last year.
Despite this dip, all three of BNP’s main divisions reported higher pre-tax income. The corporate and institutional banking unit led the charge, seeing a 12.5% rise in sales, setting a new record as market volatility sparked increased client activity.
Overall, the bank’s group revenues grew by 3.8%, reaching nearly €13 billion, also meeting analyst expectations.
BNP Paribas is the first major European bank to report quarterly results, and attention is focused on how the bank will navigate an anticipated economic slowdown. The outlook has been clouded by the trade war between the U.S. and China, which began in April. European bank shares have taken a hit this month, although there has been a slight recovery after signals from the Trump administration suggesting a potential de-escalation in the trade conflict.
CEO Jean-Laurent Bonnafe expressed confidence in BNP’s positioning, emphasizing the bank’s ability to capitalize on potential opportunities arising from Germany and the European Union’s fiscal spending initiatives. These plans, aimed at rebuilding military infrastructure and boosting economic growth, could drive corporate activity in the region.
While Bonnafe refrained from commenting directly on the economic outlook or President Trump’s tariffs, he reaffirmed BNP Paribas’ targets for the 2024-2026 period. The bank aims for an annual average net income growth of more than 7% and a sales growth target of over 5%.
However, the bank’s performance in retail banking showed signs of weakness. The Italian arm, BNL, reported sluggish results, while the car-leasing division, Arval, saw a significant 11.8% drop in sales due to falling prices in the used car market.
BNP Paribas remains committed to its long-term growth targets despite the challenges posed by global economic uncertainties.
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