BNP Paribas (BNP) Stock Drops After Record Q1 Profit Beats Estimates

TLDR

• BNP Paribas posted a record Q1 net profit of €3.22 billion, up 9% year-on-year, beating estimates by 9%
• Group revenues rose 8.5% to €14.06 billion, ahead of the €13.82 billion consensus
• AXA Investment Managers integration drove a 32.8% surge in Investment and Protection Services revenues
• The Arval and Leasing Solutions unit missed expectations, down 11.7% as used-car prices fell sharply
• BNP confirmed its 2028 targets, including return on tangible equity above 13% and net income CAGR above 10%

BNP Paribas delivered its best-ever first quarter on Thursday, with net profit climbing 9% to €3.22 billion. That beat the company-compiled consensus of €2.93 billion by a comfortable margin.

Group revenues came in at €14.06 billion, up 8.5% from a year ago and ahead of the €13.82 billion forecast. Gross operating income rose 13.7% to €5.35 billion, also clearing estimates.

CEO Jean-Laurent Bonnafé called it a “record first quarter,” pointing to momentum across the bank’s operating divisions and progress on its strategic plans. He said work is already underway to lay the groundwork for the 2027-2030 plan.

BNP Paribas S.A., BNP.DE

The cost-income ratio landed at 62%, with operating expenses of €8.71 billion coming in just under the €8.75 billion estimate. That produced a positive jaws effect of three percentage points at the group level.

One of the bigger drivers this quarter was the consolidation of AXA Investment Managers, acquired last year. Investment and Protection Services revenues surged 32.8% to €1.98 billion. Assets under management stood at €2.46 trillion as of March 31.

Corporate and Institutional Banking revenues were broadly flat at €5.24 billion, down 0.8% year-on-year but up 3.1% on a constant scope and currency basis. Global Markets revenues rose 2.5% to €2.88 billion, with Equity and Prime Services up 9.3% at constant rates.

Jefferies, which rates BNP a buy with a €127 price target, flagged that markets revenue came in 3% above its own estimate, driven by equities.

Where It Missed

Not everything landed cleanly. Commercial, Personal Banking and Services revenues rose 4.9% to €6.85 billion, just shy of Jefferies’ €6.91 billion estimate.

The Arval and Leasing Solutions unit was the clearest weak spot. Revenues fell 11.7% to €742 million as used-car prices dropped sharply in March. Pre-tax income of €253 million came in 27% below Jefferies’ estimate of €345 million.

Operating expenses rose 5.5% year-on-year, partly due to restructuring costs tied to the AXA IM integration.

The corporate centre also had some moving parts. BNP took a €219 million provision for UK Motor Finance risks following the Financial Conduct Authority’s consumer compensation scheme announced March 30. That had a net negative impact of €98 million on net income.

That was offset by a €372 million pretax revaluation of the bank’s Allfunds stake, after Deutsche Börse made an offer for the company and BNP lost significant influence in it.

Capital and Outlook

The Common Equity Tier 1 ratio stood at 12.8%, above the consensus estimate of 12.65% and up 20 basis points from the prior quarter. BNP is targeting a CET1 ratio of 13% by 2027.

Cost of risk came in at €922 million, or 39 basis points of outstanding customer loans — within the bank’s 2026 guidance of below 40 basis points.

BNP confirmed its 2028 targets, including a return on tangible equity above 13% and net income compound annual growth above 10% for the 2025–2028 period.

Despite the record profit, BNP Paribas stock fell over 4% on Thursday.

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