BNP: Positive 1Q24, Guidance Implies FY24 Upgrade

BNP 1Q24 results are positive in most areas but guidance hasn’t been upgraded here. After weak results last time, expectations weren’t that high, we feel. Equities performance is positive for SocGen, wider credit performance reads well for SG, CredAg and Intesa in Italy.

• Key credit metrics: CET1 ratio was broadly in line with consensus and Dec-23 (at 13.1%), loan losses are up to 29bp, but this is fully 25% below consensus. Guidance hasn’t been upgraded from “<40bp” for FY24, however. Non-performers are reported at 1.7% (inline).
• Wider view: revenues were 2% above consensus even with FICC underperforming the strong US peer performances. Equities were better which is positive for SocGen. Commercial & personal banking was the key revenue positive here – good for CredAg. Costs were around 2% better as well which, added with that big loan loss beat, drove a 25% net profit beat.
• Outlook: mgmt has broadly reconfirmed FY24 guidance but it’s notable that, even with today’s revenue beat, FY24 consensus is still c.2% below guidance though net income expectations are, conversely, too low.

Conf call is 1200 (London time), available at: {https://edge.media-server.com/mmc/p/trboy8u2/