BNP Paribas Q3 Earnings Up As Fortis Contributes

11/5/2009 7:50 AM ET

(RTTNews) - BNP Paribas (BNPQY.PK: News ) reported Thursday higher profit for its third quarter ended September, 30, 2009, helped by post-acquisition contribution from Fortis, as well as solid operating performance across segments.

Reportedly, the bank is on the lookout for small acquisitions, but its priority is to integrate the Fortis Bank assets acquired earlier this year.

The France-based bank group's quarterly profit before taxation was EUR 2.44 billion versus EUR 1.14 billion in the same period in 2008. Excluding BNP Paribas Fortis, pre-tax profit rose 76.1% to EUR 2.07 billion. Also, quarterly net income attributable to equity holders grew 44.8% to EUR 1.3 billion from EUR 901 million last year. The recent net income included EUR 227 million from BNP Paribas Fortis.

Retail Banking, Asset Management and Services, and Corporate and Investment Banking are the core divisions of BNP Paribas. Retail Banking comprises the French retail banking division, BNL Banca Commerciale in Italy, BancWest, retail banking emerging markets, personal finance and equipment solutions.The Asset Management and Services business includes private banking, asset management, online savings and trading, securities services, real estate services and insurance. The Corporate and Investment Banking division operates in advisory and capital markets as well as in financing businesses.

BNP Paribas' quarterly revenues rose 40% to EUR 10.66 billion from EUR 7.61 billion a year ago, as revenue across divisions improved. BNP Paribas Fortis contributed EUR 2.23 billion to revenues in the recent third-quarter, excluding which revenues were up 14.3% to EUR 8.63 billion. Segmentally, revenues from retail banking, investment solutions, CIB divisions, were up, 4.1%, 0.2% and 42.6%, respectively.

Retail Banking revenues rose to EUR 1.52 billion from EUR 1.46 billion, driven by good sales and marketing. Investment solutions division saw a growth in assets under management, yet revenues were stable EUR 1.20 billion from, as Wealth & Asset Management's revenues improved, while insurance revenues took a blow. Corporate investment banking arm witnessed a sharp revenue increase at EUR 2.93 billion from EUR 2.05 billion, reflecting on sustained customer demand and a sharp drop in the cost of risk.

For the quarter under review, operating expenses were up 30%, yet gross operating income soared 55.3% to EUR 4.62 billion from EUR 2.97 billion. Despite a 15.5% increase in the cost of risk, the group reported strong operating income of EUR 2.32 billion versus EUR 989 million last year, which was marked by the failure of Lehman Brothers.