European banks posted third-quarter results that largely beat expectations, even as investors reacted unevenly. HSBC, Europe's biggest bank by market value, reported a 32 per cent rise in pre-tax profits to $9.6bn on revenues 5 per cent higher at $18.6bn. Its shares nonetheless ended 6 per cent lower after failing to impress investors who had expected a bigger windfall from rising interest rates.
BNP Paribas posted better than expected profits and revenues and unveiled a €1.3bn share buyback, a sign of confidence in its outlook as international investors fret about France's budget and public finances. Net income rose 13.5 per cent year on year to €3.5bn. The bank said its core capital ratio would exceed its target of 13 per cent by year end. Its investment bank had a second strong quarter in a row, though French borrowing costs have risen above 5 per cent for the first time since 2002, weighing on French banks.
UBS reported an 8 per cent rise in third-quarter net profit to $2.7bn, driven by strong inflows from wealthy clients in Asia-Pacific and the Americas. Pre-tax profits of $3.6bn were up 27 per cent, and underlying pre-tax profits of $4.1bn exceeded analysts' forecasts of $3.8bn. Chief executive Sergio Ermotti urged lawmakers to find a solution to proposed tougher capital requirements that would protect financial stability without imposing "undue costs" on shareholders, clients and employees.
Deutsche Bank reported record quarterly net profits, driven by strong corporate banking performance, despite a 20 per cent rise in credit loss provisions to €501mn linked to troubled commercial real estate loans. Group revenues rose 4 per cent to €8.3bn, and net profit increased 2 per cent to €1.9bn, beating analyst expectations. Chief executive Christian Sewing's strategy to reduce reliance on volatile investment banking revenues appears to be working.
Source: Financial Times Companies · Summarized by HeadlinesBriefing