France’s biggest listed bank BNP Paribas forecast a drop in bad debt charges and was upbeat on its prospects for 2010 despite the economic uncertainty clouding the global finance sector.
“I remain quite confident about this year,” said chief executive Baudouin Prot as BNP posted a forecast-beating fourth quarter net profit of €1.36bn (£1.18bn). Profits were boosted by lower-than-expected bad debt provisions and higher earnings at its investment banking arm and recently acquired Fortis retail bank.
Its profit rose 4.6 per cent from the previous quarter and swung back from a big loss a year ago. Group revenues came in slightly below forecasts at €10.06bn. The bank’s dividend rose to €1.50 a share from €1.
Global markets have been rocked in recent weeks over fears of the economy of Greece, which is grappling with a trade deficit, but Prot said BNP had a relatively small exposure to Greece. BNP shares closed up 3.96 per cent at €51.15, among the best performers on France’s benchmark CAC40 index which rose 1.5 per cent.
BNP Paribas is the first of France’s top banks to post fourth-quarter results. Rival Societe Generale, which issued a profit warning last month, publishes results today while Credit Agricole and BPCE report next week. BNP set aside €500m for its 2009 bonus payout with payments lower than many of its peers. The average 2009 bonus payout for BNP Paribas traders stood at €125,000 and the compensation-to-revenue ratio is 27.7 per cent against 40 per cent last year.
City A.M. Reporter