BNP Paribas posts 13.2% drop in profit

France’s biggest bank BNP Paribas said its second quarter net profit fell a better-than-expected 13.2 percent to 1.85 billion euros ($ 2.26 billion) from the previous year. Analysts polled by AFP had predicted profits to come in at 1.7 billion euros, but BNP Paribas’ resistant retail banking unit helped offset a European economic slowdown amid the ongoing debt crisis. Earnings by its retail bank remained mostly stable, while the investment bank posted a 40 percent plunge in pre-tax income from a year ago to 821 million euros, hit by the difficult economic environment. The overall group result was also lifted by exceptional items including a debt re-evaluation, which boosted the bank’s earnings by 286 million euros. “Thanks to its balanced and diversified business model and the dedication of all its employees, BNP Paribas Group performed well this quarter in a challenging economic and market environment,” said the chief executive officer Jean-Laurent Bonnafe in a statement. The bank said its fully loaded Tier 1 capital ratio — a key measure of financial health — was at 8.9 percent, just under the the nine percent target set under the international Basel III agreement to shore up the global financial sector. BNP Paribas said it had completed 90 percent of its adaptation plan aimed at sheltering it from future crises. “The adaptation plan is almost achieved, well ahead of schedule, solvency has been strengthened and the objective of a Basel III... has virtually been attained,” Bonnafe said. “BNP Paribas is today one of the best-capitalized amongst the leading global banks,” he said. The bank said its second quarter revenues were 10.1 billion euros, down eight percent year on year. Revenues were up slightly, by 0.5 percent, in retail banking but down 23.6 percent in corporate and investment banking. Operating expenses were down four percent to 6.3 billion euros and gross operating income was at 3.76 billion euros, down 14.1 percent. From arabnews