France's biggest listed bank, BNP Paribas, beat expectations yesterday as retail profits helped offset a 73 per cent plunge in corporate and investment banking.
First-quarter net profit fell 21 per cent to €1.981 billion (Dh11.2bn) as BNP Paribas' investment banking division made a €514 million write-down due to the impact of the credit crunch.
The bank beat an average net profit forecast of €1.675bn from a Reuters poll of 20 analysts.
Gross operating profit fell 23 per cent to €2.79bn, below an average forecast of €2.89bn.
"Delivering nearly €2bn of profit in such a climate is a good result," said West LB analyst Christoph Bossmann, who kept a "buy" rating on BNP Paribas.
GSD Gestion fund manager Christophe Gautier, who holds BNP Paribas shares, also said the results were good. "They have not made as many write-downs as the Anglo-Saxon banks," he said.
In April, Citigroup posted a $5.1bn quarterly loss that reflected more than $16bn of write-downs and credit-related costs.
BNP's fall in earnings was smaller than that announced this week by French rival Société Généralé, which reported a 23 per cent drop in net profit. BNP Paribas said its first-quarter performance showed the company's resilience. "This performance confirms the group's ability to weather the storm and to continue to pursue its development strategy," Chief Executive Baudouin Prot said in a statement.
The French company's retail banking profits were boosted by higher earnings at its Italian bank BNL and in emerging markets such as Turkey and Egypt. Its French retail bank also had a seven per cent rise in profit as it won new customers.
Its investment banking write-downs included an €86m write-down on an leveraged buy-out underwriting portfolio, €103m on securitisations and €182m on monoline insurers. It made a further €143m of credit adjustments on other counter parties.
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