By Inti Landauro and Matthieu Protard
PARIS, July 31 (Reuters) - BNP Paribas BNPP.PA, France's largest bank in terms of assets, on Wednesday said a strong performance by its corporate and investment banking division had buoyed its profits above expectations during the second quarter.
Net profit rose 3.1% to 2.47 billion euros ($2.8 billion) out of 11.22 billion euros in revenues. Analysts from Credit Suisse, UBS and Jefferies respectively expected a net profit of 2.06 billion euros, 2.28 billion and 2.21 billion.
BNP Paribas, which is the second largest eurozone bank in market capitalization after Spain's Banco Santander SAN.MC, attributed its performance to strong growth at its corporate and investment banking (CIB) unit.
The CIB arm's overall revenues rose 4% to 3.1 billion euros and pre-tax profit grow by 6.2% to 1.06 billion euros.
Favorable market conditions as well as the first effects of a 350 million euro cost-cutting plan launched in February after a difficult fourth quarter, beefed up the unit's profitability, said BNP Paribas.
"Corporate and institutional banking delivers a strong beat thanks to revenues and a cost management," wrote Jefferies analysts Maxence Le Gouvello Du Timat and Martina Matouskova.
The performance of corporate and investment banking unit lifted BNP Paribas' overall performance for a second consecutive quarter.
Major European banks such as BNP Paribas have struggled to drive profitability because low interest rates have constrained returns from retail banking and have become more dependent on corporate and investment banking businesses.
Whereas other large banks such as Citigroup C.N in the U.S. have reported signs of pressure in their main Wall Street business and corporate banking arms, BNP Paribas has managed to keep that part of its business relatively strong.
However, pre-tax profit at BNP Paribas' retail banks in Western Europe shrank 1% to 2.56 billion euros.
Its international financial services division, which groups insurance, non-Western European retail, international consumer credit and other businesses, also reported a 1% pre-tax profit decline to 1.44 billion euros.
($1 = 0.8966 euros)
(Reporting by Inti Landauro and Matthieu Protard)
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