By Pietro Lombardi


Shares in BNP Paribas SA gain ground after the bank's trading operations posted another good performance in the third quarter, helping profits fall less than expected despite higher loss provisions.

France's largest-listed bank by assets joined other European peers, such as Deutsche Bank AG, which also posted better-than-expected results and good performances from their trading businesses.

Global markets revenue rose almost 32% on year, with fixed-income revenue up 36%, BNP said Tuesday.

The performance of the trading operations helped revenue remain roughly stable at 10.89 billion euros ($12.68 billion). This, coupled with lower operating costs, meant that net profit declined by just 2.3% to EUR1.89 billion, beating analysts' expectations.

BNP shares were up 6.4% at 0833 GMT.

European banks have posted results above expectations this quarter but with countries across the region stepping up measures to tackle the spread of the coronavirus pandemic, analysts and investors are likely to focus on what lies ahead.

"This set of results confirmed the resilience of the group's profitability and balance sheet, as well as the benefit of the diversification, but a key focus for investor is the outlook for profitability in 2020/2021 given increased restriction and lockdown due to the Covid-19 second wave," Citi analyst Azzurra Guelfi said.

BNP, one of Europe's largest banks, set aside EUR1.25 billion for potential loan losses. This was 47% more than the same period last year but less than it set aside in the second quarter.

The bank seems to be navigating the coronavirus pandemic better than it had expected, with profits in the first nine months ahead of the guidance it gave for the full year, namely a decline in net profit of between 15% and 20%. That outlook was confirmed in the second quarter.

BNP's core Tier 1 capital ratio --a key measure of capital strength-- was 12.6% at the end of September, up from 12.4% in June.


Write to Pietro Lombardi at; @pietrolombard10


(END) Dow Jones Newswires

November 03, 2020 03:58 ET (08:58 GMT)

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