BNP Paribas reports better than expected Q1 results

Risk costs, reflecting provisions for bad loans, were down 37% to €896m

France's BNP Paribas reported better than expected profit in the first quarter, helped by lower bad loans provisions from the pandemic and a rebound in its equity trading business.

Net profit rose 37.9% to €1.77bn (£1.5bn, $2.14bn) from a year earlier, beating a forecast of €1.20bn by Refinitiv analysts.

Revenue was up 8.6% at €11.83bn, above the €11.2bn expected by analysts.

In its corporate and investment banking activities, revenue rose by 24.3%, bolstered by a 41.4% rise in its markets business.

BNP Paribas said a rebound in equity trading offset a 15.7% drop in fixed income, currencies and commodities trading.

"Primary, credit and commodity derivatives activities performed very well but the context was less favourable than in the first quarter of 2020 for rates and forex activities," the bank stated.

It reported no impact from the implosion of US investment fund Archegos, which has caused more than $10bn of losses across other global banks.

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BNP Paribas also said it expected the economy to gradually recover from the pandemic. Its cost of risk, reflecting provisions for bad loans, was down 37% to €896m. 

BNP's equity business brought in €697m, a strong performance compared with a year ago, when widespread dividend suspensions wiped out all of its earnings.

The bank has expanded its equities business, buying Deutsche Bank's prime broking and electronic trading units in 2019. 

Last month it said it would take full control of its equity brokerage Exane to bolster its European business.

Shares in BNP Paribas have risen 24.7% so far this year.

FURTHER READING: Standard Chartered beats profit expectations amid plans to halve global branch network

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