Business

BNP Paribas profits hit by Greek debt writedowns

BNP Paribas
Image caption BNP Paribas says 2012 has got off to a good start

BNP Paribas, France's biggest listed bank, has reported a 50% fall in profit for the final three months of 2011, after taking further losses on its Greek debt holdings.

It reported net income of 765m euros ($1bn; £641m) for the quarter, after writing down its Greek assets by a further 567m euros.

The bank said it had now written down the value of its Greek debt by 75%.

For 2011 as a whole, net income was down 22.9% to 6bn euros.

Despite the sharp fall in fourth quarter profits, BNP's results were better than analysts' expectations and quarterly revenues of 9.69bn euros were also stronger than forecast.

Shares in BNP rose 7% in early trading in Paris, with investors also encouraged by news that the bank had hit new capital requirements ahead of schedule.

The bank's Tier 1 capital ratio - assets held in reserve as a buffer against financial troubles - has reached 9.2%. European regulators have set banks a minimum ratio of 9% to be hit by the end of June 2012.

In an interview with Reuters Insider TV, BNP Paribas chief executive Jean-Laurent Bonnafe said he was optimistic that 2012 would be a better year.

"The beginning of the year has been quite strong in investment banking. [We see] some kind of stabilisation of the eurozone situation," Mr Bonnafe said.

"[We see] some kind of a slowdown in Europe... not a recession."

Banks across Europe have seen their profits hit by the eurozone debt crisis which has forced them to write down their exposures to sovereign debt.

BNP Paribas said it had written down its holdings of Greek debt by a total of 3.45bn euros in 2011.