(adds first half figures, sales breakdown and comment on subprime exposure)
PARIS (Thomson Financial) - BNP Paribas said second quarter net profit jumped 20 pct to 2.282 bln eur, from 1.901 bln a year earlier, beating analyst forecasts thanks to strong revenue growth and an unexpected record performance in corporate and investment banking.
Net banking income for the period was 8.214 bln eur, up 13.4 pct from 7.245 bln in the second quarter of last year, while operating income came out at 3.108 bln eur versus 2.957 bln last year.
A consensus of analyst estimates compiled by Thomson Financial had put net profit for the second quarter at 2.006 bln eur, up 5.5 pct from 1.901 bln eur a year earlier. Net banking income was seen at 7.780 bln eur, representing a rise of 7.4 pct versus the second quarter of 2006, while operating income was forecast at 2.994 bln eur.
First half net profit totaled 4.789 bln eur, up from 3.914 bln last year, while net banking income was 16.427 bln eur in the first six months, versus 14.062 bln a year earlier. EPS for the first six mon ths of the year was 5.22 eur, up 17.9 pct year-on-year.
The corporate and investment banking division, which accounts for 31 pct of group revenues, put in an unexpectedly strong top line performance in the second quarter, with 24.0 pct growth compared to a 5 pct rise in the first quarter of the year.
The group said corporate and investment banking revenues reached a new record high of 2.479 bln eur, which is 3.5 pct higher than the previous record in Q1 2007.
The main driver behind this performance was the group's capital markets business where revenues jumped 32.4 pct, boosted primarily by fixed income activities. However, equity derivatives also performed well, along with primary equity in the Asia region.
BNP noted that its corporate and investment banking division 'has not been directly impacted by the subprime crisis in the US, and to date has not seen any deterioration in the quality of its leveraged finance portfolio.'
The group reiterated comments made by Standard & Poor's in a report dated July 10, in which it said 'BNP Paribas' exposure to the risks which are fuelling current concerns is either limited (US subprime) or well managed (leveraged finance)'.
Domestic retail banking remained a weak spot, with revenues rising 1.1 pct on an absolute basis of 3.5 pct excluding the effect of PEL/CEL provisions. This is slightly below the group's full year guidance of 4.0 pct growth in restated French retail revenues, but had been largely anticipated by analysts.
Asset management and services remained a strong growth driver, with 21.9 pct growth in second quarter revenues, maintaining the strong performance seen in the first quarter of the year. vicky.buffery@thomson.com vb/ejb COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
© 2007 AFX News
