French Banks Report Strong Q2 2022 Despite Provisions Related to Uncertain Macroeconomic Outlook

DBRS Morningstar has released a commentary discussing large French banks’ Q2 2022 earnings, covering BNP Paribas SA, Société Générale S.A., Crédit Agricole Group and Groupe BPCE.

Summary highlights from the commentary include:

• French banks delivered another solid performance in Q2 2022 with strong revenue growth, especially in CIB.
• Operating expenses continued to grow to accompany higher activity levels but still with positive jaws.
• Cost of risk was up on ex-ante provisions in view of the uncertain macroeconomic outlook, but remained at low levels.

“Large French banks reported higher net profits, when excluding the one-off impact from the disposal of SocGen’s Russian operations”, said Arnaud Journois, Vice President from the DBRS Morningstar Global Financial Institutions team. “Results were driven by strong revenue growth in almost all business lines, notably in CIB. However, they reported higher loan loss provisions in view of the uncertainty regarding the macroeconomic environment. Nevertheless, cost of risk remains at low levels and we continue to consider French banks as having the ability to weather the current challenging environment, thanks to their high degree of business diversification.”