BNP quarterly profit rises

French bank BNP Paribas on Thursday beat forecasts with a 31 percent rise in quarterly profit based on money management and retail banking growth but the results were flattered by one-off gains.
The Paris-based bank, the eurozone's largest by market value, earned 1.263 billion euros ($1.53 billion) in the first three months compared to 962 million in the year-ago quarter.
BNP also spent 716 million euros on share buybacks in the first quarter.
Capital gains were 65 percent higher than they were a year ago and bad debt provisions were nearly 28 percent lower, although the profit exceeded a Reuters poll of 18 analysts that showed BNP on average was likely to earn 994 million euros.
"The results were fine but the headlines flatter the underlying numbers, because there were a lot of capital gains," said Stephen Jarvis, an analyst at Morgan Stanley.
The improving economy, particularly in the United States, enabled BNP to cut bad debt provisions to 245 million euros. The year-ago quarter included an 85 million euro general lending risk provision. BNP also took advantage of steady stock markets to log 397 million euros in capital gains.
The investment bank reduced operating expenses and bad debt provisions in the quarter.
The latter remain significant only in Europe, BNP said. The leveraged finance arm also had a 50 million euro capital gain.
Pre-tax retail banking profit rose nearly eight percent to 697 million euros, even though the US dollar's weakness curbed gains at US operations, BNP said.
Pre-tax money management and services income rose 62 percent to 224 million euros, and investment and corporate banking income rose 27 percent to 614 million euros.
"The beginning of the year is marked by an expansion drive: corporate and investment banking has reinforced its leadership position in Europe, retail banking and asset management services have considerably expanded their customer bases, and the acquisitions under way in the United States and Europe will expand the group's scope," BNP Chief Executive Baudouin Prot said in a statement.