Revenue Slumps at BNP Paribas, but Profit Rises on Cost-Cutting

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Jean-Laurent Bonnafe, chief of the French bank BNP Paribas.Credit Benoit Tessier/Reuters

LONDON — The French bank BNP Paribas reported better-than-expected earnings in the third quarter despite lower overall revenue and a nearly 11 percent decline in its investment-banking business resulting from a “lackluster” economic environment.

BNP, the largest French bank, said on Thursday that its profit rose 2.4 percent, to 1.36 billion euros, or $1.86 billion, from 1.33 billion euros in the year-ago quarter. Revenue fell 4.2 percent, to €9.29 billion.

The bank benefited from cost-cutting as its operating expenses were down 2.1 percent, to €6.43 billion. BNP said the quarter included a one-time benefit of €145 million from its restructuring efforts.

Analysts surveyed by Reuters had expected BNP to post a third-quarter profit of about €1.32 billion.

The bank made its profit “thanks to the good resilience of its revenues, the ongoing containment of its costs and the decline of its cost of risk,” said Jean-Laurent Bonnafé, the bank’s chief executive.

In its home market, its French retail bank saw revenue rise 1.3 percent, to €1.73 billion, with deposits increasing 3.2 percent in the quarter.

Like many of its peers, BNP said revenue was down in its investment bank because of lower client activity in its fixed-income business, where revenue declined 27.1 percent, to €780 million.

Overall revenue in the investment bank declined 10.7 percent, to €2.03 billion, from €2.38 billion in the third quarter of 2012.

For the first nine months of the year, BNP said profit declined 22.2 percent, to €4.7 billion, from €6.05 billion in the period a year earlier, while revenue declined 1.4 percent, to €29.3 billion.

The prior nine-month period reflected the sale of its 28.7 percent stake in the real-estate firm Klépierre to the Simon Property Group for about €1.5 billion.

The bank said its core Tier 1 capital ratio, a measure of a bank’s ability to weather financial disturbances, rose to 10.8 percent at the end of the quarter from 9.5 percent at the end of the third quarter of 2012.