BNP Paribas downplays French debt exposure as stock trading lifts profit

The French multinational bank BNP Paribas beat profit forecasts in the third quarter as revenue from equities trading surged 50%, and announced a €1.3 billion share buyback while playing down its exposure to French debt.

France's biggest bank reported net income of €3.46 billion in the third quarter on Wednesday, up 13.5% from a year earlier and ahead of the €3.23 billion that analysts surveyed by BNP Paribas had expected on average.

A 50% jump in equities trading revenue drove the beat, and BNP said it would buy back €1.3 billion of its own shares from November, while stressing that its exposure to France's fiscal crisis was limited.

Revenue rose 9.5% to €13.76 billion, led by the bank's corporate and institutional banking arm, where revenue climbed 16.6% to €5.2 billion.

Within it, global markets revenue jumped 21.9% to €2.67 billion, close to the record set in the first quarter of this year. Equity and prime services, which includes trading shares and offering services such as lending and clearing to hedge funds, brought in €1.46 billion, up 50%.

Fixed income, currencies and commodities trading was flat at €1.22 billion, as growth in Asia and foreign exchange offset weaker credit and interest rate business.

"The Group achieved a very strong third quarter driven by the operating performance across all three divisions," CEO Jean-Laurent Bonnafé said in a statement.

Revenue at the commercial and personal banking and services division, which serves households and businesses, rose 3.6%, supported by the interest rate environment and higher fees.

Car leasing was a weak spot, with Arval and Leasing Solutions seeing revenue drop 29.1% as used-car prices fell.

The cost of risk, the money set aside for loans that may not be repaid, rose to €964 million, or 39 basis points of customer loans, just inside the bank's 2026 guidance of under 40 basis points.

BNP said its Common Equity Tier 1 (CET1) ratio, a key measure of a bank's financial strength, stood at 12.9% at the end of September, and it expects it to rise above 13% by the end of the year, boosted by the sale of BMCI, its Moroccan subsidiary.

The buyback, approved by the European Central Bank, comes ahead of the payout of 2026 profits.

BNP confirmed its targets through 2028, including a 12% return on tangible equity this year, rising above 13% in 2028. It will set out a new 2030 strategic plan on 2 February.

Its shares traded about 1.5% lower at the open in Paris on Wednesday.

Playing down France's debt troubles

The results land in the middle of France's political and fiscal crisis.

The yield on French 10-year government bonds rose above 5% last week for the first time since 2002, as a divided parliament struggles to pass next year's budget amid mass street protests.

Ratings agency Moody's kept France's rating unchanged on Friday, but with a negative outlook.

BNP said it held around €19 billion of French government bonds, about €16 billion of which are booked at amortised cost, an accounting treatment under which swings in their market price do not hit its capital.

It estimated that a further 0.5% widening in the gap between French and German bond yields would trim its CET1 ratio by only about 0.02 points.

France generated under 10% of the parent company's pre-tax income in 2025, roughly half its share in 2016, according to the bank's results presentation, meaning BNP has significantly diversified away from the French market in recent years.