(3 May 2016 – France) BNP Paribas posted a surprise increase in first-quarter profit.
The French bank said declining provisions for bad loans helped compensate for a slump in trading revenue.
The lender’s net income increased to €1.81 billion (A$2.77 billion) from €1.65 billion a year earlier.
BNP's common equity tier 1 ratio (CET1), advanced to 11 percent at the end of the first quarter from the preceding three months’ 10.9 percent.
Along with its global peers, BNP is seeking to cut costs to assist with the effects of record-low interest rates, turbulent markets and tougher regulatory requirements. Earlier this year, the Paris based bank announced a €1 billion cost reduction plan, including reducing numbers at its investment bank by about 675 staff.
Speaking about additional staff reductions at the investment bank, chief financial officer Lars Machenil said “It's too early to say.”
“We'll look at this country by country,” he said.
The bank's return on equity was 9.4 percent in the first quarter, which said was in line with the company's targets through this year.
“In a particularly unfavorable market environment, the group's revenue held up well thanks to the diversity of its geographies and businesses,” said chief executive Jean-Laurent Bonnafe.
“Operating expenses are well-contained and the cost of risk is down significantly.”
Compared to a year before, the bank’s pretax profit at the corporate and institutional bank dropped by 55 percent to €403 million. Over the same period, trading fixed income, currencies and commodities revenue decreased by 13 percent, while sales at its equities and prime-services business reduced by 41 percent.