PARIS: BNP Paribas aims to grab market share from rivals pulling back from investment banking even as its moves ahead with its own cutbacks, the French bank said on Friday.
With regulatory pressures weighing on risky activities, many European banks from HSBC to Deutsche Bank are trying to scale back their investment banks.
BNP Paribas has taken a more measured approach to revamping its investment bank, said Chief Officer Philippe Bordenave, who plans an update on the bank's own cost-saving plan at the end of the year.
After the bank reported forecast-beating quarterly earnings, Bordenave said that aim was to "continue developing business lines we have identified as promising and win market share at a moment when some of our competitors are pulling back."
Strong investment bank revenue helped France's largest bank post net income of 2.56 billion euros ($2.8 billion) for the second quarter, which also benefited from a 420 million gain on the sale of a 7 percent stake in shopping mall group Klepierre.
The result marked a turnaround from the same quarter last year, when the bank booked a 4.22 billion euro loss due to a nearly $9 billion fine for breaking US sanctions.
"With the potential for strategic change in (investment banking), we are encouraged by developments for the first time in many quarters," Jefferies analyst Omar Fall said in a research note.
BNP Paribas shares were up 3 percent at 59.42 by 0848 GMT, while the wider euro zone banking sector gained only 0.3 percent.
Return on equity topped 10 percent a year ahead of target as laid out in its 2013-2016 strategic plan, which includes 3 billion euros in recurring cost cuts from 2016. Revenue reached 11.08 billion euros in the quarter.
The strong dollar helped its international financial services and investment banking division with 20 percent of revenue in dollars.
Investment and corporate banking revenue rose 15.6 percent, with high volumes in share trading as equity markets hit all-time highs in many countries.
While equity and prime brokerage revenue rose 22 percent, fixed income revenue suffered as the Greek crisis unsettled debt markets and a major bond sell-off dampened corporate issues.
Consumer finance revenue rose 26.7 percent, boosted by the July 2014 acquisition of its LaSer department store consumer credit business.
Citing a gradual recovery in loan demand, the bank said revenue rose 2.7 percent in its main retail markets of France, Italy, Belgium and Luxembourg, as low interest rates remained a drag.
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