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BNP Paribas Results Miss; CEO Says Italy 'Sound'

Second quarter profit and revenue at BNP Paribas missed forecasts on Tuesday as it took a 534 million euro ($761.1 million) provision due to its holdings of Greek debt.

BNP Paribas
AP
BNP Paribas

Second-quarter net profit at the French bank rose by 1.1 percent to 2.128 billion euros, but fell short of a Reuters forecast of 2.234 billion euros.

Second quarter revenue meanwhile fell by 1.7 percent to 10.981 billion euros, below expectations of 11.167 billion euros.

The group's management said it had taken a 21 percent loss on holdings of Greek debt maturing before 2020.

The bank holds 2.3 billion euros worth of this type of Greek bonds.

Baudouin Prot, the CEO of BNP Paribas, told CNBC he is aiming to reach a return on equity target of 15 percent but warned meeting that target was challenging.

"We're presently at 13.8 (ROE), the second half is traditionally a bit weaker than the first half," he said. "I said to the market that 15 percent was our target and I keep it as a target. But it was rather challenging. I believe that's exactly where we are, it is a target, but it is challenging," he said.

Amid fears over problems in Greece and the euro zone’s periphery on Italy, Prot said the euro zone’s third largest economy is in a far stronger position than those that have been forced to take aid from the EU and IMF.

“I think Italy in it's own right is very different from any peripheral euro zone situation, in terms of sovereign debt, I think Italy has a very strong savings rate, it has a strong economy, it has a bit of a low growth, so they need more structural reforms to increase the growth potential, but their fundamentals in their fiscal is much more sound.”

“I'm concerned by the present situation in terms of markets, but I'm not worried about Italy so far,” Prot said.