BNP Paribas reported better-than-expected profits for the third quarter, indicating that its cost-cutting plan is on course to be completed by the end of the year.
The bank posted a net income of 1.9 billion euros ($2.1 billion) in the third quarter of 2019. Analysts had estimated a net income of 1.7 billion euros, according to data firm Refinitiv.
Here are the other highlights:
"We have solid growth," Lars Machenil, CFO of BNP Paribas told CNBC's Charlotte Reed.
"If you look at (the third quarter), basically credit volumes are up 5%, but so are the revenues, up by 5%, and even this in an environment of low rates in Europe. And this is basically a tribute to BNP Paribas (for) being diversified, because on top of that we have this revenue growth in each of our three divisions and also we kept on focusing on cost reduction."
The French bank introduced a cost-reduction plan in early 2017. BNP Paribas said that the transformation costs seen in the third quarter are in line with the bank's targets and they should come to an end, as initially planned, by the end of this year.
BNP Paribas shares are up about 20% year-to-date. Its shares were marginally lower in early European trade Thursday. The largest French bank in assets had reported a net income of 2.47 billion euros in the second quarter of this year.
Banks in the euro zone have struggled over recent years amid the low interest rate environment — the lower the rates are, the lower the margins for banks.
In this context, to support the banking system, the European Central Bank (ECB) introduced in September a tiered system of interest rates — meaning that a portion of bank deposits are exempted from an ECB charge. However, BNP Paribas questioned how effective this measure will be.
"The tiering, as it is now, it helps somewhat the lowering of the short-term rate. However, if there's also QE (quantitative easing), which has an impact on the longer-term rates, it will be insufficient in its current form," Machenil told CNBC.
The ECB announced a series of steps to prop up prices in the euro zone after a meeting in September. Alongside the tiered system, it also said that it would be re-starting QE and it cut its deposit rate to record lows.