BNP Paribas shares fall as some Q4 results details disappoint

BNP Paribas shares are trading in negative territory Tuesday, after the bank published fourth quarter earnings results, which included elements that missed analyst expectations. The stock is also suffering amid a broader market sell-off.

By 1125 BST, BNP Paribas shares were 2.80% in the red at €63.55. The BNP Paribas stock is now only a little above where it was at the start of 2018.

BNP Paribas Q4 earnings miss

The French-based bank said net profits in the fourth quarter of 2017 totalled €1.43 billion, just down from €1.44 billion a year earlier and below expectations of €1.59 billion, according to a Reuters poll of analysts.

One reason behind the profits miss was likely due to the bank having to set aside a larger than previously anticipated amount for bad loans. BNP Paribas said its cost of risk in Q4 at its CIB unit was €264 million, much higher than the €70 million in 2016.

Q4 revenues at BNP Paribas also fell 1.2% from a year earlier – to €10.53 billion. However, the company’s activities still allowed it to increase share dividends to €3.02.

“With 7.8 billion euros in net income, BNP Paribas delivered a good performance in 2017, thanks to its integrated and diversified model in service of clients,” said BNP Paribas’ CEO, Jean-Laurent Bonnafé.

“There was sustained development in the business activities of the operating divisions supported by a stronger economic growth in Europe, costs are under control and the cost of risk is significantly lower,” Bonnafé added.

Improved outlook                

Despite some disappointing figures in the financial services provider’s earnings report, BNP Paribas was able to announce an improved outlook for 2018.

The Bank confirmed it’s 2.5% annual revenue growth target between now and 2020. BNP Paribas also said it is now expecting a return on equity of above 10%. Previously, the Bank said it anticipated a 10% return on equity.

“The start of the 2020 plan is promising with businesses strengthening their commercial positions, an acceleration of digital transformation and the Group’s commitment for a positive impact on society,” Bonnafé said.