BNP Paribas beats rivals on profit and capital target

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BNP Paribas beats rivals on profit and capital target

BNP Paribas beats rivals on profit and capital target
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Bucking the eurozone trend, France’s biggest bank, BNP Paribas, has reported better-than-expected results.

It made 1.8 billion euros in the three months up to June. That was a 13.2 percent drop in net profit, which was smaller than analysts had predicted.

It is also being ultra cautious looking at low limits on how much eurozone government debt it holds.

Chief Executive Jean-Laurent Bonnafe said the bank wants to set a ceiling of 10 billion euros per country for its sovereign debt holdings.

Bank analyst Christophe Nijdam of AlphaValue told euronews: “Although a collapse of the euro is unlikely, it’s now more plausible, so it is being included in possible scenarios, and the French banks are getting organised for that, it’s good management, to prepare for the euro area breaking apart. “

BNP’s better than expected profit came after a series of spending cuts, staff layoffs and sales of assets, and as had to set aside less money that feared for losses on loans not being repaid.

It also said it was further forward than rivals with building up the larger capital reserves demanded under stricter banking regulations.

It hit the target to strengthen its capital base six months early it strives to reassure investors worried about its exposure to the region’s sovereign debt crisis.

The news puts it well ahead of domestic competitor Societe Generale and in the top tier of banks across Europe.

European banks, including Germany’s Deutsche Bank and UBS of Switzerland as well as the second largest French bank Societe Generale, have reported dismal second-quarter results, hit by the eurozone’s debt problems and economic weakness.