PARIS (dpa-AFX) - French banking giant BNP Paribas Group (BNPQY.PK) Thursday reported about 72 percent drop in third-quarter profit, as the company set aside more than 2 billion euros in Greek sovereign debt provisions.
The company has made provision for 60 percent of the full amount of all Greek sovereign debt it holds, which equated to a cost of risk of 2.14 billion euros.
In the third quarter, net income attributable to equity holders dropped 71.6 percent to 541 million euros (about $741 million) from 1.91 billion euros reported last year.
Excluding the Greek debt provision, net income increased 2.4 percent to 1.95 billion euros, the company said.
Baudouin Prot, Chief Executive Officer of the company said, 'The new Greek debt restructuring plan has adversely impacted this quarter's net income, which, otherwise, is in line with the performances of previous quarters. During this very challenging quarter, BNP Paribas continued to generate profits and to maintain its solvency ratio at a high level.'
The company's net asset value per share as at September 30 increased 5.8 percent to 57.4 euros compared to the same period last year.
Group revenues for the quarter declined 7.6 percent year-over-year to 10.03 billion euros. In Retail Banking, revenues grew 0.7 percent to 5.87 billion euros and revenues in Investment Solutions improved 2.5 percent from last year to 1.55 billion euros.
Meanwhile, in Corporate and Investment Banking division, revenue dropped 39.8 percent to 1.75 billion euros, due to very challenging market conditions and losses on sales of sovereign bond debt totaling 362 million euros.
Revenues from the Corporate Centre were 870 million euros, up from 617 million euros in the previous year. The company said Corporate Centre revenues were affected by two exceptional items related to valuing of long-term assets and liabilities at market price amounting 786 million euros in own debt revaluation and 299 million euros in additional impairment on equity investment in AXA.
Tier 1 ratio improved to 11.9 percent from 11.4 percent at the end of the year 2010.
'With 60% of its Greek debt holdings covered by provisions, its reduced sovereign debt exposure and lower funding needs in dollars, BNP Paribas is well positioned to take on the challenges of a new environment,' Prot added.
In the Paris Stock Exchange, the company's shares are currently trading at 29.45 euros, down 0.23 euros or 0.79 percent, on a volume of 1.94 million shares.
In US, BNPQY.PK closed Wednesday's regular trading at $20.35.
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