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Investing.com -- BNP Paribas SA (EPA:BNPP) shares climbed over 3% after the bank reported a smaller-than-expected decline in second-quarter profit on Thursday, as strength in fixed income trading and a recovery in its European retail operations helped offset a higher tax charge in the United States.
Net income for the quarter dipped 4% year-on-year to 3.26 billion euros ($3.83 billion), slightly ahead of analyst expectations. Revenue rose 2.5% to 12.6 billion euros, in line with estimates, while provisions for bad loans were broadly as forecast.
The investment banking division saw a 27% surge in fixed income, currency and commodity trading revenues, supported by market volatility following U.S. President Donald Trump’s tariff announcements. However, a drop in equity trading weighed on the unit, and global banking pre-tax income fell.
Overall investment banking revenue rose 4% from a year ago.
BNP said its global banking business was affected by trade tensions, geopolitical uncertainty, and dollar weakness. Still, its retail and consumer operations posted a 4.3% increase in net interest income in France, while insurance earnings grew sharply due to solid underlying income and a one-off gain from a financial stake in China.
BNP’s common equity tier 1 ratio stood unchanged at 12.5% at the end of the quarter. The bank announced an interim dividend of 2.59 euros per share, to be paid on September 30.
Analysts praised the lender’s operating performance. “Revenue performance in European retail was a standout and sets up well for H2 25 acceleration,” Jefferies analyst Joseph Dickerson wrote in a note. “Elsewhere, the group exhibited strong cost control with 80bps of positive jaws."
BNP CEO Jean-Laurent Bonnafe was upbeat about the months ahead, saying the “outlook for the second half of the year is very encouraging, with expected revenue acceleration driven by Commercial & Personal Banking.”
The group said it expected to exceed 12.2 billion euros in net income this year, slightly above the consensus forecast of 12.11 billion euros and ahead of the 11.7 billion euros earned in 2024. The guidance is in line with BNP’s 2024–2026 strategic targets.