BNP Paribas Earnings: Low Interest-Rate Sensitivity Continues to Limit Revenue Growth

BNP Paribas reported a pretax profit of EUR 4.1 billion for second-quarter 2023, 3% below what it disclosed a year earlier but ahead of the consensus estimate for the quarter by the analysts polled by the company. Nonrecurring items continue to distort BNP's results somewhat; on a normalized basis, pretax profits grew by 7% year-on-year. Even on a normalized basis, revenue growth was limited. As anticipated, securities trading income declined by 13% year-on-year as the trading environment stabilized, especially for fixed-income securities. BNP is less sensitive to interest rates than most European peers, given the regulated nature of interest rates paid on savings deposits in France and its greater exposure to corporate banking. Costs were well controlled; only growing by 2% in an environment with high inflation is a good achievement. Loan-loss provisions are tracking below guidance, with no signs of credit-quality deterioration.