BNP Paribas net income tops $3.8bn
Paris, May 5, 2012
BNP Paribas, France's No 1 listed bank, yesterday said it had almost wrapped up its plan to sell assets and cut debt to strengthen financial firepower after its first-quarter profits were boosted by the sale of shares in Klepierre.
Euro zone-focused BNP, one of the world's biggest banks by assets, has been retrenching from its international empire since last summer's flare-up of the euro zone debt crisis triggered a fresh wave of cutbacks across the investment bank industry.
BNP reported net income of 2.87 billion euros ($3.77 billion), up 9.6 per cent from a year-ago figure of 2.62 billion. This was above forecasts for 2.3 billion, according to the average of analyst estimates.
Earnings were flattered by a 1.5 billion euro capital gain from the sale of part of its stake in real estate group Klepierre to Simon Property Group in March.
BNP's revenue, however, fell by a higher-than-expected 15.4pc to 9.89bn euros, hit by own-debt accounting charges and losses from the sale of sovereign bonds as it reeled back its exposure to the euro zone's troubled periphery.
BNP chief executive Jean-Laurent Bonnafe said the bank would soon be in a stronger position to grow its business but warned that its capital markets unit had seen a 'less positive' start to the second quarter after a central bank-driven rally petered out. 'Eighty per cent of the deleveraging is done,' Bonnafe said.
Like smaller rival Societe Generale, which reported results on Thursday, BNP ploughed ahead with its strategy of selling loan assets and sovereign bonds in the quarter to boost capital as the industry races to meet tougher incoming lending rules in a slowing economy.
This push is almost complete for BNP, which said its end-March core Tier 1 capital ratio - a key measure of banks' ability to withstand losses - had risen to 10.4pc under a tougher methodology known as Basel 2.5. SocGen's stood at 9.4.
BNP's corporate and investment bank, which is bearing the brunt of asset sales and job cuts under a voluntary departure plan, saw pretax profits fall by almost a third.
Although revenue from bonds, currencies and commodities trading grew 6.6pc in the quarter, this failed to match SocGen's surprise 39pc surge in the same period.-Reuters