Financial analysts awaited the results of the second quarter of BNP Paribas with some caution, on the lookout for the slightest sign of a slowdown in activity. Finally, the first bank in the euro zone surprised by publishing record net income of 3.2 billion euros, up 9%, well above consensus expectations, with a positive contribution from all businesses. Once once more, revenue growth (8.5%) outpaced cost growth (+7.5%). Over the half-year, net income amounted to nearly 5.3 billion euros (+13%) for net banking income up 10% to 26 billion euros.
The bank points out “its solid trajectory” confirmed by these results. They notably reflect excellent performances in retail banking in France, in car leasing (Arval) and in corporate and investment banking. Which bodes well for Societe Generale, which is due to present its results next Wednesday, despite the loss of 3.2 billion euros that the bank will collect to settle its Russian adventure.
In detail, it is the good quarterly performance of the retail banking and specialized financial services division that stands out, with an 11% increase in income to 7.2 billion euros. Note, in particular, the strong growth in outstanding loans (+7%) and deposits (+7.5%). Arval’s business and Leasing Solutions jumped 33% and its pre-tax income rose 72% to 545 million euros. As in the first quarter, CIB activities generally support the group, with revenues up 10.6% to 4.1 billion euros.
Low cost of risk
In a difficult market context, the bank relied on its strengths, such as interest rate and foreign exchange products, and commodities. Equity derivatives were also buoyed as the stock markets experienced a disastrous semester. Financing transactions with large companies, on the other hand, are down, the latter having eased off refinancing, given the rise in interest rates. Another salient point is that the cost of risk remains low, at 33 basis points, despite new allocations to ex ante provisions, that is to say, on unproven risks.
Finally, with the exception of the Swiss banks, the major European banks publish results rather above the consensus. This is the case of Deutsche Bank in Germany or BBVA in Spain. As if economic activity remained on its 2021 dynamic despite inflation, rising interest rates and the war in Ukraine.
