BNP Paribas loses €870m on Greek debt hit
BNP PARIBAS disappointed analysts with its fourth quarter results yesterday as it revealed that it booked an €872m (£725.7m) hit from the Greek debt crisis last year and its investment bank saw profits plunge.
More than half of the loss on its stock of Greek bonds – €510m – was booked in the fourth quarter of last year.
But the bank also said that if it were to assume a 75 per cent write-down on all its holdings of Greek paper, rather than just the loss it has crystallised so far, the hit would multiply to €3.24bn in total. That would leave it with Greek bonds worth €972m.
Overall, pre-tax profits were down from €13bn in 2010 to €9.7bn last year, due to large declines at its investment bank, investments division and “other” activities.
The fourth quarter brought a 44 per cent fall in profits to €1.3bn.
But revenues rose in every division last year except BNP Paribas’ investment bank, where top line income dropped 12.6 per cent last year, or 19.8 per cent with the sovereign bond hit included, to €9.7bn.
The bank managed to bring up its return on equity for the year however, to 8.8 per cent versus a small decline in value in 2010. It shrank its balance sheet by 12 per cent.