Spending cuts shore up profits at BNP Paribas

 
Tim Wallace
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PROFITS increased at BNP Paribas in the third quarter despite the weak economy in France, thanks to a tough cost-cutting programme, the bank said yesterday.

The biggest bank in the country made profits of €1.36bn (£1.15bn) in the three-month period, up 2.4 per cent on the €1.33bn in the same period of 2012.

Its revenues fell 4.2 per cent on the year to €9.29bn, but its operating expenses fell 2.1 per cent per cent to €6.43bn.

By business unit, retail profits fell 9.2 per cent on the year to €1.52bn, on a 3.4 per cent fall in revenues to €5.95bn. BNP’s investment bank saw a 23.7 per cent fall in profits to €552m.

However, its investment solutions business pushed profits up 1.6 per cent to €506m.

The bank cut its cost of risk by 5.5 per cent to €892m, and expects expenses across the group to fall further in future. It spend €145m on its Simple and Efficient programme, a cost-cutting drive to save €2bn per year by 2015.

The bank’s fully loaded Basel III common equity tier one capital ratio increased 40 basis points on the quarter to 10.8 per cent.

Chief executive Jean-Laurent Bonnafe said the numbers will stand up well to Europe’s upcoming stress tests.

“Even if some minor fine tuning could be required here or there, I am confident that we shall be well above the required thresholds,” he said.

BNP Paribas’ shares rose 3.4 per cent.