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BNP Paribas’ traders helped its investment bank to a record quarter, extending the gains from Trump-induced market volatility from Wall Street to Europe.
The French bank’s investment banking division reported revenues of €5.3bn for the first three months of the year, up 12.5 per cent from a year earlier.
BNP’s equity and prime services traders drove the increase, with a 42 per cent rise in revenues for the division to €1.2bn.
US President Donald Trump’s erratic trade and policy announcements have led to wild swings in stock markets, giving traders a chance to exploit market moves.
BNP’s results come after Wall Street’s biggest banks brought in almost $37bn in trading revenues in the first three months of the year off the back of the market uncertainty.
The record quarter from the French bank’s investment banking division helped propel revenues across the group to almost €13bn, up 3.8 per cent from the previous year and slightly ahead of analysts’ estimates.
But net income fell by 4.9 per cent to €2.95bn, just shy of expectations, after exceptional items boosted earnings in 2024, including an accounting decision relating to the BNP’s business in Ukraine.
Despite the boost to equity trading, BNP saw more modest growth in its global markets unit — which houses its mergers and acquisitions, equity capital markets and debt capital markets businesses — of 4.5 per cent.
Volatility has restrained dealmaking across Wall Street and Europe, as stock market swings have dashed hopes that Trump’s election would help spur a revival of the market for initial public offerings and mergers and acquisitions.
BNP’s retail bank also posted sluggish growth of just over 1.2 per cent, with revenues from its car leasing business Arval falling 12 per cent due to lower used-car prices.
The lender announced a shake-up of the retail division earlier this year, an overhaul that will involve it investing in new technology and cutting back the number of branches in France.
BNP confirmed its guidance for the 2024-26 period, an annual growth rate of 5 per cent. It also reported a common equity tier one ratio of 12.4 per cent, a measure of financial resilience, in line with analysts’ estimates.
Earlier this month, the bank’s shares took a hit after an opinion from the European Central Bank left it exposed to a larger than expected hit to capital from its €5bn acquisition of Axa’s asset management arm.
BNP said that any decision not to apply a rule known as the Danish Compromise would expose it to a 0.35 percentage point hit to CET1, compared with 0.25 points under the previous scenario.
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