BNP Paribas reports profits of 2,760 million euros

BNP Paribas, the biggest bank in the euro zoneobtained a higher-than-expected net profit in the third quarter, thanks to the fact that income from financial intermediation operations helped offset the increase in costs and the downward adjustment in the value of some financing operations.

Net profit in the three months to the end of September rose 10.3% from a year earlier to €2.76 billion ($2.73 billion), versus the €2.36 billion average forecast in a Refinitiv survey of analysts.

Revenue increased 8% to €12.3 billion.

The increase was mainly due to a 14.7% increase in revenue from global markets trading, as volatility boosted trading in commodity, interest rate, currency and emerging market derivatives in particular.

Equity and prime services (services offered by banks to funds and other investment clients), an area where BNP has been expanding, also saw a small rise in revenue.

However, BNP said investment banking revenue had been hit by writedowns in the value of unsold positions in leveraged financing.

Rising interest rates and market turmoil have forced the big banks to keep debt on their balance sheets for longer than they would have liked and to incur losses on some financing packages.

Operating expenses also rose 6% from a year earlier, including the impact of restructuring and information technology costs, BNP Paribas said, while a 34% rise in cost of risk was due to an extraordinary charge of 200 million euros in Poland, where a moratorium has allowed borrowers to suspend mortgage payments.