BNP Paribas – The Bank That Does it Better

France’s largest listed bank beat analysts’ expectations in the third quarter. Former Swiss National Bank President Philipp Hildebrand sees BNP as a role model. Also for Credit Suisse.

BNP Paribas has been building its relationships with businesses across Europe in recent years, which is now starting to pay off, a look at Thursday’s quarterly results shows. France’s largest listed bank increased its net profit by 10.3 percent year-on-year to 2.76 billion euros ($2.69 billion), beating analysts’ forecasts.

At a time when companies are hedging their operations against rising energy prices, BNP Paribas’ corporate and investment bank earnings were boosted in particular by income from commodity derivatives and interest rate trading.

These activities helped to offset a decline in income from the capital markets business, which is not surprising as recession fears led companies to hold back on stock market listings while slowing the financing of acquisition deals.

BNP Paribas shined in investment banking. Amid high, double-digit revenue declines at rival banks, BNP booked a third-quarter revenue decline of just 2 percent in global banking but gained market share.

Nevertheless, the satisfying result does not immediately make BNP the top address in Europe, although there are signs that BNP is chipping market share away from Credit Suisse in equity and investment banking.

BNP Paribas attributed its fixed income performance in the third quarter to reallocation and hedging needs in commodities, interest rates and foreign exchange products, and emerging markets. This may cause Credit Suisse to regret its decision to close its own emerging markets trading business.

Last November, Credit Suisse agreed with the French bank to refer clients of its debacle Prime Services unit to them.

With the results of BNP Paribas, former Swiss National Bank president Philipp Hildebrand likely sees himself vindicated in his statement recently saying Credit Suisse and other European banks need more clarity. He went on to praise BNP Paribas as the European bank with the right business model to attract investors.

With that, perhaps BNP Paribas will hire Carly Simon to sing Nobody Does it Better at the next annual meeting to celebrate the results.