By Nicolas Darbo, Partner, Accuracy
At the start of this year, CIB businesses, which have already been performing well for the past five years, posted very strong results, particularly in the capital markets. This was largely thanks to the sharp rise in volatility in recent months following the election of Donald Trump. These performances enabled US banks to achieve excellent results and BNPP to compensate the slightly weaker growth in its retail banking operations.
JPMorgan Chase beats expectations in first quarter amid “considerable turbulence”
I’ve said it before: JP Morgan’s results in 2024 were exceptional. Revenues grew by 12% over the year, and even by 50 billion in two years, the equivalent of a bank like BNPP! Growth was across all business lines, with CIB up 15%, AM up 11% and retail up 2%. Operating expenses and risk were kept under control, enabling the bank to post a net profit of €58 billion and an unprecedented ROE of 18%.
From this point of view, it is not necessarily easy to reproduce such a performance, especially in an economic context that has changed over the last three months. The Q1 results were therefore eagerly awaited. Overall, they were very good: revenues were up 9% to €45.3 billion, and operating expenses and cost of risk were contained. Net profit came to €14 billion and ROE remained stable compared with 2024 at 18%. Not bad.
By major business line, retail banking, which grew by 3.5%, has not yet felt the effects of the current crisis, whether in terms of lending volumes or risk. CIB was mixed, with market activities buoyed by volatility (+17% and +36% in fixed income and equity), but investment banking fees were logically down (-8%). AM has not yet been affected by the fall in the markets, posting growth of 10%. Another good start to the year.
Morgan Stanley reports an excellent first quarter 2025
Of the six major US banks, three are fairly balanced in their business lines (BoA, Citi and Wells Fargo); in Europe, they could be described as quasi-universal banks, even if insurance is lacking. A fourth bank, JP Morgan, has a similar profile, although its stellar performance puts it more in the UFO category. And then there are two large investment banks, which managed to stay alive after the subprime crisis, with a mandate to diversify.
Goldman Sachs and Morgan Stanley have therefore tried to develop new business lines, initially with quite different strategies. MS has built up a powerful asset management and private banking business (46% of its revenues in 2024) through acquisitions. GS has made a bolder choice, less adjacent to its original business lines: retail banking, under the Marcus brand. But this new business never exceeded 5% of total revenues.
Sixteen years after the subprime crisis, GS is still much more focused on CIB than MS, representing 70% of revenues for the former compared with 46% for the latter. As a result, GS could have benefitted more from the very volatile markets of the first quarter. The opposite is true, however: MS’s revenues rose by 17% overall, compared with just 6% for GS, with all business lines performing better, including CIB itself.
Boosted by its investment bank, BNP Paribas is off to a good start in 2025
Despite an uncertain economic environment, BNP Paribas posted a solid performance in Q1 2025. The Group benefitted from the robustness of its operating divisions, in particular CIB, which had a record quarter with 12.5% growth in revenues. The savings businesses confirmed their momentum with growth of 6.6%, driven by insurance and private banking.
Commercial banking also showed good fundamentals, with a 4.2% rise in revenues in the eurozone and strong digital momentum. Hello bank! now has 3.7 million customers, and Nickel continues to grow. The interest rate environment remains favourable, underpinning interest margins, while specialised businesses posted mixed performances, particularly Arval, which was affected by the fall in second-hand car prices.
Net profit came to €2.95 billion, down slightly (-4.9%) on Q1 2024, which was marked by exceptional items. The cost of risk remained contained at 33 basis points, reflecting the solidity of the portfolio. With a CET1 ratio of 12.4%, the Group maintains a solid capital base. BNP Paribas thus confirms its 2024–2026 trajectory and its driving role in financing the European economy.