French Banks' Q1 2025 Results: Revenues Strong, Bottom Line Mixed

This quarter, the four large French banks -- Groupe Crédit Agricole; BNP Paribas SA; Société Générale, S.A.; and Groupe BPCE -- reported aggregate revenue growth of 5.8%, mainly driven by corporate and investment banking.

Key highlights include the following:

-- Corporate and investment banking drove revenues growth in the double-digit range on the back of market volatility and customer activity. Most other segments also reported positive revenue trends.
-- Profits do not reflect the strength in revenues, as expenses, credit costs, and taxes all increased.
-- Cost of risk increased from low levels as asset quality remained stable. Precautionary measures to reflect the current uncertainty are still limited.

"Until mid-2024, rising rates had adversely affected French banks' net interest income because of a large stock of regulated deposits that track policy rates and a high proportion of long-term, fixed-rate loans", said Sonja Förster, Senior Vice President of European Financial Institutions at Morningstar DBRS. "As policy rates are decreasing, this should benefit French banks; however, the full benefit depends on the particular hedging strategy applied by each of the French banks."