BNP Paribas Posts Fourth-Quarter Loss, Cuts Dividend

BNP Paribas, the French bank embroiled in plans to carve-up struggling rival Fortis, posted an expected fourth quarter loss and said market conditions would remain tough in 2009.

AP

France's biggest bank by market capitalisation on Thursday reported a net loss of 1.37 billion euros ($1.73 billion) -- in line with guidance given last month for a loss of around 1.4 billion euros.

It also cut its dividend by 70 percent from last year to 1 euros per share.

Last year, it made a fourth quarter net profit of around 1.01 billion euros.

BNP was hit by losses at its investment banking arm, a 345 million euro exposure to an alleged $50 billion fraud by U.S. financier Bernard Madoff, and by a slump in the economy of Ukraine, where it has operations.

BNP said it would cut jobs in Ukraine and close down 100 bank branches in that country.

BNP expected market conditions for 2009 to remain very difficult but added it was well-placed to cope with the tough climate.

Its results were worse than those posted on Wednesday by French rival Societe Generale.

SocGen reported a fourth quarter net profit of 87 million euros and increased its dividend by 33 percent.

However, BNP's losses were not as bad as those suffered by many of its rivals, such as Swiss banks UBS and Credit Suisse which posted fourth quarter losses of 8 billion and 6 billion Swiss francs respectively.

BNP is currently in talks with the Belgian government over trying to find a solution for Fortis, whose shareholders have voted against state-led deals to carve up Fortis and hand over some of its main assets to the French bank.

BNP Paribas shares closed up 2.6 percent at 24.62 euros on Wednesday, giving the bank a market capitalisation of around 22 billion euros. The stock has fallen around 19 percent since the start of the year, compared to a 22 percent drop in the DJ Stoxx European bank sector.

The shares lost 0.5 percent on Thursday.

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