France’s biggest bank says net profit fell 52%

France’s biggest bank says net profit fell 52%

PanARMENIAN.Net - French bank BNP Paribas SA reported sharply lower fourth-quarter net profit on Friday, Feb 5, hit by a hefty write down on its Italian bank, BNL, and said it planned to trim its corporate and investment bank to meet stricter financial regulation in Europe, the Wall Street Journal says.

The Paris-based lender, France’s largest listed bank by assets, said net profit fell 52% to €665 million ($745 million) in the three months ended Dec 31, from €1.38 billion a year earlier. Revenue, however, increased 3% to €10.45 billion from €10.15 billion in the same quarter last year.

BNP Paribas booked a €917 million write-down in the quarter after European regulators asked it to set aside additional capital for BNL following an intensive review.

“BNP Paribas’s results this quarter are reassuring given how challenging the earnings season has been for banks so far,” said Nomura analyst Jon Peace.

The bank’s shares were up 4.4% in early trading Friday, according to the Journal.

The French bank also said it planned to cut risk-weighted assets at its investment bank by €20 billion by 2019 to wind-down “unproductive” assets and “right-size low return activities.” About half of the capital freed-up will be reinvested in more profitable and less capital intensive businesses, the bank said.

The target is to achieve €1 billion in cost savings by 2019 and promote average annual growth of 4% for investment banking revenue between 2015 and 2019. The bank expects to generate €1.6 billion in additional pretax income compared with 2015.

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