Key Takeaways
- France’s largest bank reported €3.22 billion in first-quarter net income, a 9% annual increase that exceeded analyst forecasts by 9%
- Total revenues reached €14.06 billion, climbing 8.5% and surpassing the €13.82 billion analyst consensus
- Revenue from Investment and Protection Services jumped 32.8% following the integration of AXA Investment Managers
- Arval and Leasing Solutions underperformed with an 11.7% revenue decline amid plummeting used-vehicle valuations
- Management reaffirmed 2028 financial goals, targeting return on tangible equity exceeding 13% and net income growth above 10% annually
France’s banking giant BNP Paribas reported its strongest first-quarter performance ever on Thursday, with net income advancing 9% to reach €3.22 billion. The result exceeded the company-compiled analyst consensus of €2.93 billion by a significant margin.
Total group revenues reached €14.06 billion, representing an 8.5% year-over-year increase and surpassing the €13.82 billion analyst projection. Gross operating income jumped 13.7% to €5.35 billion, likewise beating expectations.
Chief Executive Jean-Laurent Bonnafé described the results as a “record first quarter,” highlighting strong performance across the bank’s operating segments and advancement on strategic initiatives. He noted that preparations for the 2027-2030 strategic plan have already commenced.
The bank’s cost-income ratio registered at 62%, with operating costs totaling €8.71 billion, slightly below the €8.75 billion estimate. This delivered a positive jaws effect of three percentage points at the consolidated level.
A major contributor to quarterly performance was the consolidation of AXA Investment Managers, which the bank acquired in the previous year. The Investment and Protection Services division saw revenues soar 32.8% to €1.98 billion. Total assets under management reached €2.46 trillion at quarter-end.
Corporate and Institutional Banking revenues remained essentially unchanged at €5.24 billion, declining 0.8% on a reported basis but advancing 3.1% when adjusted for constant scope and currency. Global Markets revenues increased 2.5% to €2.88 billion, with Equity and Prime Services climbing 9.3% at constant exchange rates.
Jefferies analysts, who maintain a buy rating with a €127 price objective, noted that markets revenue exceeded their internal projection by 3%, primarily driven by equities performance.
Areas of Weakness
The quarter wasn’t without disappointments. Commercial, Personal Banking and Services revenues increased 4.9% to €6.85 billion, falling marginally short of Jefferies’ €6.91 billion forecast.
The Arval and Leasing Solutions business represented the most significant underperformer. Revenues contracted 11.7% to €742 million as used-vehicle prices experienced a sharp decline in March. Pre-tax earnings of €253 million missed Jefferies’ €345 million estimate by 27%.
Operating costs rose 5.5% year-over-year, partially attributable to restructuring expenses related to integrating AXA IM.
The corporate centre segment also contained several notable items. The bank established a €219 million provision for UK Motor Finance exposure following the Financial Conduct Authority’s consumer compensation framework announced on March 30. This resulted in a net €98 million negative impact on bottom-line earnings.
This charge was partially balanced by a €372 million pretax revaluation gain on the bank’s Allfunds holdings, stemming from Deutsche Börse’s acquisition offer and BNP’s corresponding loss of significant influence over the entity.
Capital Position and Forward Guidance
The Common Equity Tier 1 ratio registered at 12.8%, exceeding the consensus projection of 12.65% and improving 20 basis points from the previous quarter. The bank maintains a CET1 ratio target of 13% by 2027.
Cost of risk totaled €922 million, representing 39 basis points of outstanding customer loans — comfortably within management’s 2026 guidance of below 40 basis points.
BNP Paribas reaffirmed its 2028 strategic objectives, including achieving return on tangible equity above 13% and delivering net income compound annual growth exceeding 10% throughout the 2025–2028 timeframe.
Notwithstanding the record-breaking quarterly profit, BNP Paribas shares declined more than 4% during Thursday trading.
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