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BNP Paribas' Profit Falls, Confident on '08

BNP Paribas, France's biggest listed bank, posted lower fourth-quarter profits on Wednesday in line with its guidance but said it was confident of growth in 2008.

BNP Paribas
AP
BNP Paribas

Net profit fell 42 percent to 1.006 billion euros ($1.5 billion), in line with guidance given on Jan. 30.

Writedowns related to the global credit crunch hit gross operating profit, which fell 6.9 percent to 2.233 billion euros.

BNP Paribas announced a total of 898 million euros of writedowns during the fourth quarter, comprising provisions and depreciations, but its earnings compared favorably to those of other banks hit harder by the credit crisis.

Earlier this month UBS posted a fourth quarter net loss of 12.45 billion Swiss francs while U.S. banks Merrill Lynch and Citigroup both reported fourth quarter net losses of $9.8 billion in January.

BNP Paribas raised its dividend by 8.1 percent to 3.35 euros and was confident about its own prospects despite ongoing uncertainty in world financial markets.

"In 2008, the environment remains challenging and the markets exceptionally volatile but I am confident in BNP Paribas' capacity to again produce very good operating performance relative to the banking industry, thanks to the powerful growth drive of all its business lines serving customers and its stringent risk management policy," Chief Executive Baudouin Prot said in a statement.

SocGen Speculation

Huge trading losses announced by rival French bank Societe Generale in January have reignited speculation that BNP Paribas might bid for SocGen. BNP narrowly failed to buy SocGen in 1999.

Last month, BNP Paribas said it was looking at SocGen.

Prot told French business radio station BFM on Wednesday that the situation at SocGen was "complex" and it was too early for him to say more on the matter.

"The repercussions of these wholly exceptional events are not easy to analyze, especially given the current market environment," said Prot.

"In these conditions, the situation is really complex and its consequences are not that clear at this stage."

BNP said it would maintain its usual discipline regarding acquisitions and highlighted plans to boost its presence in fast-growing emerging markets such as Brazil, China and India.

BNP Paribas shares closed lower by 0.5 percent at 59.69. The stock has fallen around 19 percent since the start of 2008, compared to a 17 percent fall in the DJ Stoxx European bank sector. BNP Paribas shares fell 10 percent in 2007.