Investment banking drove sector growth in the first quarter

The uncertainty surrounding the trade war launched by US President Donald Trump and the volatility it is creating in financial markets have led corporate and investment banks (CIBs) to carry out many more transactions to hedge their clients' risks and protect them from these sharp fluctuations, which has allowed them to earn more commissions.

The foreign exchange market, for example, has reached levels of volatility not seen since 2009.

"BFIs, especially trading rooms, when there's so much activity and they're properly managed, can make a lot of money. This has been the case for American banks, for BNP Paribas, and to a certain extent for Société Générale," commented Mathieu Gosselin of the consulting firm Bartle.

The corporate and investment bank of French banking giant BNP Paribas posted record net banking income (NBI, equivalent to turnover) between January and March, at 5,28 billion euros (+12,5% ​​year-on-year) for nearly 2,3 billion euros in pre-tax profit.

With a 10% increase in NBI to 2,9 billion, and a net profit that jumped 22,8% to 856 million, Société Générale's corporate banking, which includes in particular the financing and investment businesses, also remained the driving force of the group.

Crédit Agricole also recorded a "record level of revenue" within its CIB in the first quarter of 2025, up 7,3% to €1,9 billion year-on-year, while BPCE achieved a "historic quarter", with NBI up 13% to €1,2 billion and net profit of €400 million (+16%).

retail bank

Deutsche Bank also recorded its best first quarter in 14 years, with profit up 39% to €1,8 billion. For the investment bank in particular, revenue from fixed income and foreign exchange products jumped 17% to €2,9 billion, the bank said.

Italy's largest bank, Intesa Sanpaolo, reported a net profit of €2,6 billion for the first quarter, up 13% year-on-year, driven by an increase in fees from wealth management activities (+8,3%).

While Swiss giant UBS's profit and revenues declined slightly from January to March, its investment banking revenues increased 16% to nearly $3,2 billion, with its markets business jumping 32% to nearly $2,5 billion.

Mr. Gosselin, however, emphasizes that these gains for the banks come from the pockets of real-world players.

"All of this is additional financial costs. The question is how will the real economy hold up? We'll very quickly see the risk spread to credit risk [and] business loans," he believes.

Moreover, the overall quarterly performance of French banks "is a little less strong than what we find in the rest of Europe," David Benamou, investment director at Axiom AI, explained to AFP.

"In general, retail banking in France has low profitability. Moreover, the very French players have been heavily taxed on their profits this year," he points out, due to the exceptional surcharge on large companies introduced at the beginning of the year.

Only Société Générale fared better: the NBI of its division, which notably includes retail banking, increased by 14,1% to 2,3 billion euros in the first quarter of 2025, with net profit multiplied by more than 13 to 421 million euros.

Illustrative image of the article via Depositphotos.com.