TLDR
- France’s largest bank reported first-quarter net income of €3.22 billion, a 9% annual increase that exceeded analyst projections by 9%
- Total revenues climbed 8.5% to reach €14.06 billion, surpassing the €13.82 billion analyst consensus
- Revenues from Investment and Protection Services jumped 32.8% following the consolidation of AXA Investment Managers
- Arval and Leasing Solutions saw an 11.7% revenue decline as secondhand vehicle valuations dropped significantly
- The French lender reaffirmed its 2028 financial objectives, targeting return on tangible equity exceeding 13% and net income growth above 10% annually
BNP Paribas announced its strongest first-quarter performance in history on Thursday, with quarterly earnings advancing 9% to €3.22 billion. The result exceeded the company-compiled analyst consensus of €2.93 billion by a substantial margin.
Total group revenues reached €14.06 billion, marking an 8.5% year-over-year increase and surpassing the €13.82 billion projection. Gross operating income jumped 13.7% to €5.35 billion, likewise exceeding market expectations.
Chief Executive Jean-Laurent Bonnafé characterized the period as a “record first quarter,” highlighting strong performance across the bank’s operating divisions and advancement on strategic initiatives. He noted that preparatory work has commenced for the strategic plan covering 2027-2030.
The bank’s cost-income ratio registered at 62%, with total operating expenses of €8.71 billion arriving marginally below the €8.75 billion consensus estimate. This delivered a positive jaws effect of three percentage points at the consolidated level.
A significant contributor this quarter was the integration of AXA Investment Managers, which the bank acquired in the previous year. Investment and Protection Services saw revenues soar 32.8% to €1.98 billion. Total assets under management reached €2.46 trillion at the end of March.
Corporate and Institutional Banking generated revenues of €5.24 billion, representing a modest 0.8% year-over-year decline but a 3.1% increase when adjusted for constant scope and exchange rates. Global Markets revenues increased 2.5% to €2.88 billion, with Equity and Prime Services advancing 9.3% on a constant-rate basis.
Jefferies analysts, who maintain a buy recommendation on the stock with a €127 price target, noted that markets revenue exceeded their projection by 3%, with equities providing the primary uplift.
Where It Missed
The results weren’t uniformly strong across all divisions. Commercial, Personal Banking and Services generated revenues of €6.85 billion, up 4.9% but marginally below Jefferies’ €6.91 billion forecast.
The Arval and Leasing Solutions division represented the most notable underperformer. Revenues contracted 11.7% to €742 million as used-car valuations experienced a sharp decline in March. Pre-tax income of €253 million fell 27% short of Jefferies’ €345 million projection.
Operating expenses increased 5.5% compared to the prior year, partially attributable to reorganization costs associated with the AXA IM integration.
The corporate centre also contained several notable items. The bank established a €219 million provision related to UK Motor Finance risks following the Financial Conduct Authority’s consumer compensation program announced on March 30. This generated a net negative impact of €98 million on bottom-line earnings.
This charge was partially offset by a €372 million pretax revaluation gain on the bank’s Allfunds holding, following Deutsche Börse’s acquisition proposal for the company, which resulted in BNP losing significant influence over it.
Capital and Outlook
The Common Equity Tier 1 ratio measured 12.8%, exceeding the consensus projection of 12.65% and rising 20 basis points from the previous quarter. BNP is working toward a CET1 ratio of 13% by 2027.
Cost of risk registered at €922 million, equivalent to 39 basis points of outstanding customer loans — positioned within the bank’s 2026 guidance calling for levels below 40 basis points.
The French banking institution reaffirmed its 2028 financial targets, which include achieving return on tangible equity above 13% and compound annual growth in net income exceeding 10% throughout the 2025–2028 timeframe.
Notwithstanding the record-breaking quarterly profit, BNP Paribas stock declined more than 4% during Thursday’s trading session.
