BNP Paribas Second-Quarter Profit Rises 20%
BNP Paribas, France's biggest listed bank, reported a 20 percent rise in second-quarter net profit on Wednesday but its shares fell as concerns about U.S. housing loans led markets lower.
The euro zone's second-biggest bank by market capitalisation said net profit rose to 2.28 billion euros ($3.13 billion), ahead of an average analyst net profit forecast of 2.06 billion euros.
Gross operating profit rose 14 percent to 3.37 billion euros, while revenues rose 13 percent to 8.21 billion.
BNP Paribas benefited from record earnings at its investment bank arm. Profits were also boosted by growth in its asset management and French retail banking divisions as well as by last year's takeover of Italian bank BNL.
However, BNP Paribas shares were down 3.5 percent at 78.82 euros in mid-morning trade, as worries over the state of the U.S housing market caused a widespread fall in European stock markets and financial stocks.
Rising U.S house prices have propped up the world's largest economy in recent years, but concerns over losses related to subprime mortgages have sent shivers through the financial sector.
The DJ Stoxx European bank index was down 2.6 percent while France's benchmark CAC-40 fell 3 percent.
Despite the fall in BNP Paribas's share price, analysts and investors remained upbeat over the company. The stock had closed up 3.1 percent on Tuesday ahead of the second quarter results.
"They were a great set of results. The stock is going down with the rest of the tide but the weakness is more of an opportunity to buy," said Stratege Finance fund manager Jacques Tissier, whose portfolio includes BNP Paribas shares.
Brokerage WestLB kept an "add" rating on BNP Paribas.
Little Impact from Subprime
Subprime mortgages are the riskiest property loans and are often extended to people who have payment difficulties or a bad credit history.
BNP Paribas said its U.S. retail bank unit BancWest had a "very limited" exposure to the subprime market. It said subprime mortgages counted for less than 2 percent of the portfolio of mortgages granted to individuals.
The group added its investment banking arm also had a negligible exposure to the subprime market.
Chief Executive Baudouin Prot said in a statement that BNP Paribas was well placed to continue to perform well in a less favourable market environment.
"BNP Paribas has not been directly impacted in any significant manner by the current U.S. subprime crisis," Prot told reporters.
See also Deutsche Bank sidesteps credit crisis in Q2 Prot also reiterated that BNP Paribas remained on the lookout for acquisition opportunities but was under no pressure to rush into any deals.
Based on latest prices, BNP Paribas shares have fallen around 5 percent since the start of 2007, in line with a 5 percent fall in the European bank sector.
Its shares raced up to a record high of 95.07 euros in May but then lost all the gains it had made over the second quarter because of the U.S. housing market conce