Company Reports

A strong quarter for BNP Paribas' equity trading desk and improving margins in French and Belgian commercial banking drove a 16% operating profit increase in the second quarter of 2026. Vehicle-leasing arm Arval was the main soft spot, with falling used-car values continuing to erode its earnings.

BNP Paribas has reported remarkably consistent earnings over the past decade—in an environment where many of its peers suffered from great volatility in earnings. Reported earnings have not grown by much, on average, over this period, and return on tangible equity was in the mid- to upper-single-digit range. However, interest rates have been at or below zero for most of the past decade. The return to normal monetary policy in the eurozone will support a structural increase in profitability for BNP Paribas to a low double-digit return on tangible equity. BNP Paribas’ midcycle profitability and earnings growth prospects are broadly in line with the average of the rest of the European banks that we cover, but its stable track record indicates it is a less risky prospect than many of its peers.

BNP Paribas has reported remarkably consistent earnings over the past decade—in an environment where many of its peers suffered from great volatility in earnings. Reported earnings have not grown by much, on average, over this period, and return on tangible equity was in the mid- to upper-single-digit range. However, interest rates have been at or below zero for most of the past decade. The return to normal monetary policy in the eurozone will support a structural increase in profitability for BNP Paribas to a low double-digit return on tangible equity. BNP Paribas’ midcycle profitability and earnings growth prospects are broadly in line with the average of the rest of the European banks that we cover, but its stable track record indicates it is a less risky prospect than many of its peers.

SpaceX has filed for one of the largest IPOs in history, with Anthropic and OpenAI expected to follow in the most significant fundraising cycle in years. No European bank holds a lead equity arranger role; that honor belongs to five US banks.

European banks have declined around 10% from their highs as rising oil and gas prices and the prospect of higher-for-longer interest rates fuel fears that loan defaults will rise.

BNP Paribas has reported remarkably consistent earnings over the past decade—in an environment where many of its peers suffered from great volatility in earnings. Reported earnings have not grown by much, on average, over this period, and return on tangible equity was in the mid- to upper-single-digit range. However, interest rates have been at or below zero for most of the past decade. The return to normal monetary policy in the eurozone will support a structural increase in profitability for BNP Paribas to a low double-digit return on tangible equity. BNP Paribas’ midcycle profitability and earnings growth prospects are broadly in line with the average of the rest of the European banks that we cover, but its stable track record indicates it is a less risky prospect than many of its peers.

BNP Paribas reported a 6% year-on-year rise in pretax profit for the third quarter, falling 2% short of the expectations of company-compiled consensus—mainly due to a credit loss of EUR 190 million tied to receivables financing. Shares declined 4% intraday.

Shares of BNP Paribas, Crédit Agricole, and Société Générale plunged 8%–10% on Aug. 27, as renewed political instability gripped France. The spread of French 10-year bonds over German bunds spiked by 14 basis points to 82 basis points —just shy of its November 2024 highs.

For the second quarter of 2025, BNP Paribas posted a 3% year-on-year increase in pretax profit, slightly above the company-compiled consensus estimate. The recovery in net interest margins is gaining traction. Credit costs jumped 18%, driven by sharply higher provisions for corporate loans.

BNP Paribas has reported remarkably consistent earnings over the past decade—in an environment where many of its peers suffered from great earnings volatility. Reported earnings have not grown by much, on average, over this period and return on tangible equity was in the mid- to upper-single-digit range. However, interest rates have been at or below zero for most of the past decade. The return to normal monetary policy in the eurozone will support a structural increase in profitability for BNP Paribas to a low double-digit return on tangible equity. BNP Paribas’ midcycle profitability and earnings growth prospects are broadly in line with the average of the rest of the European banks that we cover, but its stable track record indicates it is a less risky prospect than many of its peers.

BNP Paribas saw a 5% dip in net income for the first quarter of 2025, matching company-compiled consensus. Investment banking had a record quarter, driven by a 42% surge in equities trading revenue. The bank reaffirmed its guidance, projecting 8% annual earnings growth over the next two years.

No-moat BNP Paribas delivered solid 2024 results, posting EUR 48.8 billion in revenue and EUR 11.7 billion in net income, representing 4.1% year-over-year growth for top- and bottom-line figures—exceeding our expectations. The bank outlined its new two-year growth trajectory, targeting an average annual revenue increase of 5%, which is in line with our model, including a 1% contribution from the upcoming AXA Investment Management acquisition, expected to close in mid-2025. We maintain our EUR 85/share fair value estimate and view shares as undervalued.

BNP Paribas reported a net income of EUR 2.9 billion for the third quarter of 2024, which was in line with the consensus estimate of analysts polled by BNP. Net income declined by 16% compared with what BNP booked in the previous quarter, with a 7% decline in pretax profits exacerbated by the normalization of BNP's tax rate. Revenue grew by 3% year on year, with a particularly strong performance from BNP's fixed-income, currency and commodities, or FICC, trading operations. However, the retail banking businesses in France, Belgium, and Italy, leasing operator Arval and the equity trading business, all missed consensus revenue expectations.

BNP Paribas has agreed to buy AXA's asset manager, AXA Investment Management, for EUR 5.1 billion in cash. We estimate this values AXA IM at 14 times the earnings it booked over the last 12 months. The multiple looks expensive compared with Amundi and Schroders, which trade at P/E ratios of 10 and 11, with better operating margins. However, strategically, the deal makes sense. Asset management remains a highly profitable and capital-light business. AXA IM's expertise in alternative assets will be complementary not only to BNP's asset management business but also to its investment bank and wealth management clients.

No-moat BNP Paribas reported solid second-quarter 2024 results, somewhat ahead of company-compiled consensus expectations. As expected, the corporate and investment banking operation stood out, growing revenue by 12% year on year with a strong equity trading performance. Looking at the strong growth in underwriting fee income booked by BNP’s US peers, BNP should be slightly disappointed by its performance in this area. There was no indication of a hit to earnings from the recent volatility around the French elections. If anything, BNP’s securities trading business has benefited from increased client activity and wider bid-ask spreads. However, the spread of French bonds only started to widen in the last few weeks of the quarter. Therefore, we think it is too early to tell what the impact of higher funding costs will be. After recording a net income of EUR 6.5 billion for the first half of 2024, BNP remains on track to achieve its guidance of net income above the EUR 11 billion it booked for 2023. Credit quality remains sound, with loan-loss provisions coming in below guidance, although one specific situation inflated the impairment charge in France for the quarter. We maintain our EUR 85/share fair value estimate.

Despite the increased political risks, 4-star-rated BNP remains one of our top picks in the European banking sector, trading at a 26% discount to our fair value estimate. BNP trades at a 40% discount to the European banking sector's average price/tangible book ratio and it offers a juicy 7.5% dividend yield. While we expect BNP's midcycle profitability to lag the sector somewhat, we do not believe it justifies such a steep discount, especially if we consider BNP's remarkable historical earnings stability. France contributed only about 25% of BNP's revenue in 2023, compared with 40% for Societe Generale and 46% for Credit Agricole. BNP has deployed some excess capital into several small bolt-on acquisitions that should support incremental earnings growth. The increased volatility in European capital markets due to the French elections may be a positive for BNP's investment banking franchise as its clients will look to hedge risks on rates and currency, supporting volume, and wider spreads will support trading margins.

BNP Paribas recorded a strong rebound in its first-quarter 2024 earnings, comfortably beating the company-compiled consensus estimates of revenue, operating expenses, and credit costs. Along with Lloyds Bank, BNP is one of our preferred names for investors who want to invest in European banks. We believe BNP's discount rating relative to the average valuation of the European banking sector is unjustified. We expect BNP's midcycle profitability to lag the European banking sector average slightly, but BNP has one of the most stable earnings track records of the European banks that we cover. Given its lower interest rate sensitivity, we view BNP as a defensive option in the face of potentially lower interest rates.

BNP Paribas has reported remarkably consistent earnings over the past decade—in an environment where many of its peers suffered from great earnings volatility. Reported earnings have not grown by much, on average, over this period and return on tangible equity was in the mid- to upper-single-digit range. However, interest rates have been at or below zero for most of the past decade. The return to normal monetary policy in the eurozone will support a structural increase in profitability for BNP Paribas to a low double-digit return on tangible equity. BNP Paribas’ midcycle profitability and earnings growth prospects are broadly in line with the average of the rest of the European banks that we cover, but its stable track record indicates it is a less risky prospect than many of its peers.

BNP Paribas has reported remarkably consistent earnings over the past decade—in an environment where many of its peers suffered from great earnings volatility. Reported earnings have not grown by much, on average, over this period and return on tangible equity was in the mid- to upper-single-digit range. However, interest rates have been at or below zero for most of the past decade. The return to normal monetary policy in the eurozone will support a structural increase in profitability for BNP Paribas to a low double-digit return on tangible equity. BNP Paribas’ midcycle profitability and earnings growth prospects are broadly in line with the average of the rest of the European banks that we cover, but its stable track record indicates it is a less risky prospect than many of its peers.

We increase our fair value estimate for BNP Paribas by 11% to EUR 85/share, which equals its net tangible book value at the end of 2023 and 9.5 times what we expect it to earn for 2023. We believe BNP can generate a midcycle return on tangible equity of around 10%—in line with our cost of equity estimate.