Paris - Arabstoday
BNP Paribas, the biggest French bank, reported on Friday that its first-quarter net income rose nearly 10 percent, helped by the sale of a real estate business, and said it was on track to reach its capital strength targets. The bank, based in Paris, posted net income of 2.9 billion euros, or $3.8 billion, up 9.6 percent from the same period a year earlier. That was better than the average estimate of anlaysts surveyed by Reuters, who had expected a profit of around 2.3 billion euros. BNP Paribas’ revenue in the first three months of the year totaled 9.9 billion euros, down 15.4 percent from a year earlier. The bank said revenue was hurt by an 843 million euro charge on a revaluation of its own debt, a 142 million euro loss on the sale of sovereign bonds and a 74 million euro loss on the sale of loans. Without those charges, the firm’s revenue would have declined by only 6.3 percent compared with the first quarter of 2011, according to a company statement. First-quarter net income was bolstered by one-time items, including 1.5 billion euros from the sale of a 29 percent stake in Klépierre, a publicly traded French real estate investment trust that owns about 270 shopping centers in 13 European countries. The stake was sold in March to Simon Property Group. Without the exceptional gains, first-quarter income would have fallen 22 percent to 2.0 billion, the bank said. That is in line with the performance of Société Générale, BNP Paribas’s smaller local rival, which reported a 20 percent decline in first-quarter net income Thursday, to 732 million euros, on revenue that fell 4.7 percent to 6.3 billion euros. Under its “adaptation plan,” BNP Paribas is working to raise its common equity Tier 1 ratio, a measure of financial strength, by one percentage point to reach 9 percent this year under rules known as Basel III. The bank said its common equity Tier 1 ratio under the Basel 2.5 rules rose four-fifths of a percentage point in the latest quarter from the end of 2011, to 10.4 percent, thus attaining 80 percent of its Basel III solvency goal under the adaptation plan, it said. The firm’s chief executive, Jean-Laurent Bonnafé, said in a statement that the results reflected a “good operating performance with growing business activity” in the domestic markets and capital markets businesses. The adaptation plan, he added, “is now largely completed.” “Solvency is strengthened, the size of the balance sheet has been reduced and the target of a Basel III fully loaded 9 percent solvency ratio by Jan. 1, 2013 will make BNP Paribas one of the most strongly capitalized of the leading global banking services groups,” he added. In early morning trading in Paris, BNP Paribas’ shares fell 1.3 percent. Stock in the French bank has fallen 44 percent over the past year. Pretax profit at the corporate and investment bank fell 31 percent from a year earlier, to 1.2 billion euros, weighed down by the sale of loans that brought a sharp decline in corporate banking income. But if the effects of the adaptation plan were excluded, the bank said, profit in the division fell about 23 percent, “reflecting good performance despite the impact of deleveraging, which illustrates the diversity and the quality” of the corporate and investment bank.