BNP Paribas reports record profit, but shares fall on higher provisions

(Sharecast News) - BNP Paribas's share price fell sharply on Thursday in Paris despite the French banking group beating estimates with its first-quarter profits, as results showed over €0.9bn in provisions to cover credit losses. The firm company set aside €922m in the first quarter to cover the cost of risk, which it said was in line with its full-year guidance, but higher than the €901m expected by analysts. That's up from the €766m set aside the year before.

Nevertheless, net income rose 9% to a record €3.22bn in the first quarter, beating consensus estimates, helped by a bigger-than-expected 8.5% rise in revenues to €14.06bn.

The Corporate & Institutional Banking (CIB) division, which accounts for 37% group revenues, reported a 0.8% fall in revenues, which the bank said was down to FX and rate movements and a strong comparator with last year.

However, this was offset by 4.9% growth in the larger Commercial, Personal Banking & Services (CPBS) division (49% of group revenues) in a "favourable interest rate environment", and a 32.8% surge in the Investment & Protection Services (IPS) division, helped by the integration of AXA Investment Manager, which was taken over last year.

"The group has delivered a record first quarter, driven by very good momentum in our operating divisions and implementation of our strategic plans," said chief executive Jean-Laurent Bonnafe.

The stock was down 3.7% at €87.13 by 1249 BST.