BNP Paribas Exceeds Expectations, But 2Q Lacks Excitement — Earnings Review

By Pierre Bertrand

BNP Paribas reported its second-quarter result Thursday. Here’s what we watched:
REVENUE: The French bank posted 11.36 billion euros ($12.59 billion) in reported revenue for the second quarter. It was a 1.5% decline compared with 2Q of last year, but it exceeded estimates that saw the bank reporting EUR11.2 billion in revenue, according to analysts polled by FactSet.

NET INCOME: Reported net profit came to EUR2.81 billion, a 9.2% decline compared with reported net income from the same period last year. Despite the decline, the result exceeded analysts’ expectations of EUR2.42 billion, according to FactSet.
WHAT WE WATCHED:
– REVENUE MOMENTUM: Jefferies analysts Flora Bocahut and Theo Massing had previously cautioned that they expected this quarter to be difficult for the French bank, and though they see the fact the bank performed better than expected is a positive takeaway from the quarter, “there isn’t anything to be particularly excited about,” they wrote in a research note. Citi analysts said the bank showed better commercial banking trends than were expected, while RBC Capital Markets analyst Anke Reingen said the bank’s result was evidence of a slowdown in commercial, personal banking and services loan volume growth compared with the first quarter of the year.
– BUYBACK: The bank said Thursday that it had been granted authorization to continue buying back shares and launch its second EUR2.5 billion share buyback tranche beginning in August.
Write to Pierre Bertrand at [email protected]