PARIS: BNP Paribas on Thursday signaled lower revenue at its cash cow French retail operation as it feels the pinch from low interest rates and declining product fee income.
Chief Executive Jean-Laurent Bonnafe said France's biggest bank will adapt in line with other retail banks that are trying to boost efficiency and develop digital strategies.
Bonnafe said those retail banks which depend on making a margin by taking deposits and passing them on as loans face trouble in the current environment.
"Banks today that operate in such activities are already almost non-profitable, they can fall into losses. There are geographies where some banking systems will fall into losses," Bonnafe said, adding that BNP has a bigger market share in Europe in consumer credit than in deposits.
BNP Paribas nevertheless reported higher than expected second-quarter net income, as stronger corporate and institutional banking (CIB) revenues and a lower cost of risk offset weakness in retail.
Like other banks in Europe, BNP Paribas has been hampered in its bid to boost retail banking revenue by low rates that have eaten into margins, and by a decline in financial fees as customers balk at investing in weak equity markets.
BNP Paribas says its strength is in its diversified and integrated business model that shows resilience in changing environments, as no business unit accounts for more than 16 percent on allocated equity.
RESILIENT PERFORMANCE
Its shares rose as much as 2.4 at the opening, but later backtracked to trade down 0.8 percent versus a 1.2 percent decline in Europe's banks as a whole.
Bonnafe said it expects French retail revenue to decline by between 2 and 3 percent this year, compared with its previous guidance of stable revenue in the business.
Pretax income in domestic markets covering France, Italy and Belgium fell 2.1 percent in the second quarter despite an 11 percent fall in the cost of risk, a measure which reflects how much is set aside for bad loans.
"Resilient performance in retail banking, decent CIB revenue and progress on capital should reassure the market particularly given the currently low valuation," UBS analysts said in a note.
In France, BNP Paribas' retail banking revenue fell 3.6 percent and pretax income dropped 10 percent.
It posted a 0.2 percent rise in net profit to 2.56 billion euros ($2.8 billion) during April to June, including exceptional items such as the sale of Visa Europe shares.
Excluding exceptional items, the bank said net profit fell 4.8 percent to 2.19 billion euros.
Analysts in a Reuters poll had forecast on average a 1.4 percent fall in net profit to 2.52 billion euros.
BNP Paribas set out plans earlier this year to cut costs and shed low-yielding CIB assets, reinvesting in activities that tie up less capital, as it seeks to keep its return on equity at 10 percent beyond 2016.
CIB revenue rose 1.4 percent in the second quarter, thanks to a pick-up in client volumes in its global markets division.
BNP Paribas signals lower retail revenue in France
BNP Paribas signals lower retail revenue in France
Saudi Maaden reports 156% profit surge to $2bn on strong commodity prices, record production
RIYADH: Saudi mining and metals company Maaden has reported a 156 percent jump in its net profit attributable to shareholders for 2025, driven by higher commodity prices, record production volumes, and a one-off bargain purchase gain.
The state-backed giant posted a net profit of SR7.35 billion ($1.95 billion) for the full year 2025, an increase from SR2.87 billion in the previous year. The firm’s revenue surged by 19 percent to SR38.58 billion, up from SR32.55 billion in 2024.
This comes as Saudi Arabia steps up efforts to expand its mining sector as a pillar of economic diversification, encouraging international participation and private investment to unlock the Kingdom’s estimated $2.5 trillion in untapped mineral resources under Vision 2030.
In a statement on Tadawul, the company said: “Performance was led by record phosphate production, near record aluminum production, an increase in all three of Maaden’s main output commodity prices.”
The performance was also fueled by a 60 percent increase in gross profit, which reached SR14.79 billion. In its annual results announcement, Maaden attributed the top-line growth to “higher commodity market prices for phosphate, aluminum and gold business units,” as well as increased sales volumes in its phosphate and aluminum segments. This was partially offset by slightly lower sales volume in the gold unit.
Maaden’s CEO, Bob Wilt, hailed 2025 as a transformative year for the company, marked by strategic growth and operational excellence. “This was a great year for Maaden’s strategic growth. We delivered strong financial results and sustained operational excellence across the business,” he said in a statement.
“This was driven by growth in production across all businesses, including record-breaking DAP (di-ammonium phosphatevolumes), disciplined cost control across and a clear commitment to our role as a cornerstone of the Saudi economy,” Wilt added.
Profitability was further bolstered by an increased share of net profit from joint ventures and an associate. This included a one-off bargain purchase gain of SR768 million related to Maaden’s investment in Aluminium Bahrain B.S.C. The company also benefited from lower finance costs.
The fourth quarter of 2025 was strong, with Maaden swinging to a net profit of SR1.67 billion, compared to a loss of SR106 million in the same period of the prior year. Quarterly revenue rose 7 percent to SR10.64 billion.
The firm achieved record production of di-ammonium phosphate, reaching 6.72 million tonnes for the year, a 9 percent increase. Aluminum production remained near-record levels, while the company added a net 7.8 million ounces to its reportable gold mineral resources through discovery and resource development.
The phosphate division saw sales jump 17 percent to SR20.77 billion, with the earnings before interest, taxes, depreciation, and amortization margin expanding to 47 percent. The aluminum business reported a 9 percent increase in sales to SR10.99 billion, with EBITDA more than doubling in the fourth quarter.
Looking ahead, Wilt emphasized that the pace of growth will accelerate as the company advances key initiatives, including the Phosphate 3 Phase 1 and Ar Rjum projects, which remain on budget and schedule. Maaden has also secured a gas supply for its future Phosphate 4 project.
“This pace of growth will only accelerate. Not only as we advance projects and increase the scale of our exploration program, but as we continue to grow production and implement technology that will further modernize, streamline and unlock value,” Wilt added.
Earnings per share for the year rose sharply to SR1.91, up from SR0.78 in 2024. Total shareholders’ equity increased by 18.7 percent to SR61.59 billion.
