Published by Global Banking & Finance Review®
Posted on October 28, 2025
3 min readLast updated: January 21, 2026
Add as preferred source on GoogleBNP Paribas faces profit challenges due to rising bad loans and client caution, despite AXA integration benefits.
By Mathieu Rosemain
PARIS (Reuters) -BNP Paribas missed third-quarter profit forecasts on Tuesday as a cautious mood among major corporate clients and higher provisions for bad loans, including an undisclosed issue at its markets arm, weighed on results.
BNP's investment bank revenues rose, but trailed Wall Street rivals after a strong run in markets.
Its global banking unit, which advises and lends to large companies, saw sales fall 2.6%, slightly below forecast, as geopolitical tensions and a "wait-and-see" mood among clients slowed activity amid a weaker dollar, the bank said.
Rising debt provisions added to the challenges for the euro zone's biggest lender by assets, at a time when its shares have been hit by Sudan-related litigation.
However, the French bank raised its cost-saving targets for the integration of AXA's asset management arm.
BNP's shares were down by about 3% in early trading.
"The benefits from the AXA deal are guided to be higher but are relatively small in the group context in the near term," Royal Bank of Canada said in a note, adding that "more visibility on the Sudan case is likely to be needed for the shares to re-rate."
"The recent jury verdict awarding damages to three individual plaintiffs is fundamentally flawed as a matter of fact and law and should be overturned," BNP, which is appealing the court decision, said on Tuesday.
COST OF INTEGRATING AXA IM
BNP posted a net profit of 3.04 billion euros ($3.55 billion) for July-September, up 6.1% from a year earlier but below the company-compiled 3.09 billion-euro average of 16 analyst estimates.
Revenues climbed 5.3% to 12.6 billion euros, missing the 12.8 billion-euro average estimate.
The bank said integrating AXA's fund arm, bought this year for 5.1 billion euros, would cost about 690 million euros, with the third quarter marking its first inclusion in BNP's results.
BNP raised its synergy targets from the deal, now expecting a return on invested capital of 18% in 2028, up from 14% previously, and 22% in 2029, up from 20%.
The acquisition aims to strengthen BNP's fee-based asset management business and cut reliance on capital-heavy lending, as the bank seeks to close the gap with U.S. giants and Europe’s Amundi.
INVESTMENT BANK GROWS
Provisions to cover bad loans rose 24% year-on-year to 905 million euros in the quarter, matching expectations, but driven by a "specific credit situation" in its global markets unit. It did not give details.
In BNP's investment bank, a business CEO Jean-Laurent Bonnafe has sought to make the engine of growth in recent years, revenue rose 4.5% to 4.46 billion euros, while fixed income, currencies and commodities trading was up 3.7%.
By comparison, Goldman Sachs reported a 17% increase in fixed income, currencies and commodities, while JPMorgan's markets revenue, spanning equities and fixed income, jumped 25%.
But at BNP's commercial and personal banking division, the net interest margin - the difference between what it earns on loans and what it pays on deposits — rose 4.5% in the euro zone.
The bank kept its 2025 net income target of more than 12.2 billion euros and its guidance for a return on tangible equity of 13% by 2028.
($1 = 0.8575 euros)
(Reporting by Mathieu Rosemain. Editing by Ingrid Melander and Mark Potter)
A bad loan is a loan that is unlikely to be repaid, often due to the borrower's financial difficulties. Banks set aside provisions to cover potential losses from such loans.
Investment banking is a division of banking that helps companies raise capital by underwriting and issuing securities. It also provides advisory services for mergers and acquisitions.
Asset management involves managing investments on behalf of clients, including individuals and institutions, to achieve specific financial goals.
A corporate client is a business entity that engages with banks or financial institutions for services such as loans, investment banking, and asset management.
Provisions for bad loans are funds set aside by banks to cover potential losses from loans that may not be repaid, reflecting the bank's risk management strategy.
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