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BNP Paribas shares leap as trading revenue surges

Kumutha Ramanathan
·Contributor
·2-min read
BNP shares have reached an all-week high following its Q3 report. Photo: Angela Weiss/AFP
BNP shares have reached an all-week high following its Q3 report. Photo: Angela Weiss/AFP

BNP Paribas (BNP.PA) shares have been surging in early morning trading as its third quarter revenue from trading fixed income, currencies and commodities beat analyst estimates by 36% to €1.25bn (£1.13bn, $1.45bn), according to its quarterly financial report released on Tuesday.

Shares were up as much as 6.5%, reaching an all-week high.

The Paris-based based bank exceeded the €1bn estimate among analysts polled by Bloomberg. BNP also reported net income for the third quarter at €1.89bn.

The bank attributed its strong results in the face of COVID-19 to government support and a diversified business model.

“The economic recovery was gradual in the third quarter and occurring with differentiated momentum from one region, and one sector, to another,” the company said in a statement on Tuesday.

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“It is sustained by the extension of public support to the most affected sectors and by the implementation of plans and mechanisms to sustain the economy. Against this backdrop, BNP Paribas has benefited from its resilient model during various phases of the crisis and demonstrated a good sales and marketing drive, backed by its diversification in terms of business, region and sector, its positioning on the most resilient sectors and client segments and its continued adaptation to the health conditions.”

BNP says it's planning a return to dividend payments in 2020 when regulators lift the ban they imposed in the wake of COVID-19.
BNP says it's planning a return to dividend payments in 2020 when regulators lift the ban they imposed in the wake of COVID-19.

Lars Machenil, the chief financial officer of BNP Paribas, told CNBC that the second lockdowns will be less impactful than those imposed in March.

“The lockdowns are of a different nature than what we saw in the past. So that’s why we feel comfortable to reiterate our guidance for the full year,” Machenil said.

BNP is also planning on joining its European peers in eventually returning to dividend payments by setting aside 50% of is profits for a 2020 payout. The news comes as European regulators are expected to remove the ban they imposed on the banking industry to conserve capital in the wake of the COVID-19 crisis.

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