GO
Loading...

Enter multiple symbols separated by commas

BNP Paribas Profit Up; Concerns Over French Retail

French bank BNP Paribas beat forecasts with a 28.8% rise in fourth-quarter net profit on Thursday, but some analysts expressed concerns over the performance of its French retail banking division.

BNP Paribas, the euro zone's second-biggest bank by market capitalization, said net profit rose to 1.719 billion euros ($2.2 billion), boosted by last year's takeover of Italian bank BNL.

Twenty-one analysts polled by Reuters gave an average net profit forecast of 1.563 billion euros.

BNP Paribas' results come a day after rival French bank Societe Generale posted a 6% rise in its fourth-quarter net profit.

Gross operating profit rose 22.8%to 2.398 billion euros, below the average forecast as costs came in higher than expected at 4.654 billion euros. This rise in costs was mainly related to the takeover of BNL.

However, some analysts focused on a slowdown in momentum at its French retail banking arm. Similar to SocGen, the bank's domestic retail division has been hurt by margin pressure.

As short-term rates have risen, long-term rates have remained low, flattening out the differences between the two -- as reflected in the yield curve. A flattened yield curve squeezes banks' net interest margin, the difference between what they pay to borrow money and what they charge to lend it.

"Overall, retail's contribution to the group's earnings is disappointing," ING analysts said in a note.

BNP Paribas increased its dividend by 19%to 3.1 euros, in line with forecasts.

Its stock has risen around 5%since the start of 2007, in line with a similar increase in the DJ Stoxx European bank sector.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Learning your value

    How to make sure you get what you¿re worth at your job, why you should stop apologizing, and how to manage work-life balance. Anchor Mika Brzeznski, author of the new book "Grow Your Value," shares her strategies for juggling busy lives.

  • Why women cheat?

    Is cheating bad? Why do women cheat? The founder and CEO of affair website Ashley Madison tells all, including why he has his eye on China.

  • Judge's gavel

    The Financial Industry Regulatory Authority disciplined several financial services firms and individuals in May 2015.

U.S. Video

  • Cramer: Here's a sign the market could rally

    Wall Street's been soaking in red, but "Mad Money" host Jim Cramer has one signal to watch for that could point to another run.

  • Burger war maneuvers

    Cramer looks at the number of company's selling burgers and tries to determine the quality names, as well as those to avoid.

  • Cramer: What's driving defense?

    Cramer says that even though President Obama has made it clear the US can no longer be the world's policeman, the country can become the world's arms dealer. Profiting from defense spending.