BNP Paribas posts lower trading revenue on fixed-income drop

Bloomberg

BNP Paribas SA couldn’t avoid
the trading slump that dragged down results at its biggest US
and European competitors in the third quarter, as low interest rates and tepid demand from clients curbed activity.
Income from trading bonds, currencies and commodities at BNP fell 26 percent to 801 million euros ($932 million) from a year earlier, based on figures the Paris-based bank published on Tuesday. While BNP did increase revenue from buying and selling stocks, its global-markets business posted the lowest quarterly sales in almost two years and missed the average of five
analyst estimates compiled by Bloomberg News.
Chief Executive Officer Jean-Laurent Bonnafe is seeking to make BNP one of Europe’s top three investment banks as peers such as Deutsche Bank AG retreat. The lender is already one of Europe’s largest consumer lenders, with branch networks stretching from Italy to Poland. Earnings last quarter benefited from lower provisions for bad loans as Europe’s economy picked up, as well as a gain from
selling a stake in an Indian insurer.
Bond trading suffered as “some institutions, some businesses waited to see what was unfolding,” Chief Financial Officer Lars Machenil said in a Bloomberg Television interview. Still, he struck a note of optimism, saying that the European economyis doing well and recent announcements from the European Central Bank may lead to “more normal” conditions for bond markets going forward.
BNP shares declined as much as 3.6 percent in Paris trading — the most since May — and were down to 66.53 euros by 10:06 a.m. That trimmed this year’s gain to about 10 percent.