Owning to latest reports, BNP Paribas, one of France’s largest banks with regards to assets has said strong performance by the bank’s corporate and investment banking division has resulted into earning profits during the second quarter.
As per sources, the net profit of the bank rose to 3.1% to 2.47 billion euros ($2.8 billion) out of 11.22 billion euros in revenues. Analysts from Credit Suisse, UBS, and Jefferies respectively is expected to reach a net profit of 2.06 billion euros, 2.28 billion and 2.21 billion, as a result.
Moreover, according to reports, CIB produces overall revenues which rose 4%to 3.1. billion euros, in addition to a pre-tax growth of 6.2% to 1.06 billion euros. It was observed that favorable market conditions, in addition to first effects of 350 million euro cost-cutting plan which was launched in February, following a tedious fourth quarter, augmented the unit’s profitability, according to reports of BNP Paribas.
“Corporate and institutional banking delivers a strong beat thanks to revenues and cost management,” quoted Jefferies analysts Maxence Le Gouvello Du Timat and Martina Matouskova.
As a result, the overall performance of the investment and corporate banking unit is known to have uplifted BNP Paribas’ operational activities for the second consecutive quarter.
The result also drew attention to the struggle of major European banks to achieve profitability owning to low-interest rates which put a constraint on the returns from retail banking and made them more dependent on corporate and investment banking businesses.
It was however noticed that pre-tax profit of BNP Paribas’ retail banking business in Western Europe sank to 1% to 2.56 billion euros.
International Financial Services division which functions in commission to non-Western European retail, international consumer credit, in addition to other businesses also suggest a 1% pre-tax profit decline to 1.44 billion euros.