BNP Paribas reports 8.3% profit rise in 2012

Leading French bank BNP Paribas reported on Thursday an 8.3-percent rise in net profit last year to 6.55 billion euros ($8.76 billion), falling short of expectations owing to exceptional items but doing better than most of its rivals.

The outcome in the fourth quarter of a net profit of 514 million euros fell far short of a figure of 969 million euros broadly expected by analysts polled by Dow Jones Newswires.

In the last quarter, the bank made writedowns for its Italian branch BNL to reflect Italian requirements for an increase in capital.

The bank also raised its provisions for bad risks, mainly in respect of a particular problem at its investment arm. It also made a special allocation to its consumer credit arm.

Senior director Francois Villeroy de Galhau told BFM radio that in the light of this, the outcome for the fourth quarter was not significative because it included several exceptional items.

The fact that the bank managed to raise its profits last year from the 2011 level strengthens its strong position in Europe and puts in on a level with the best US banks in terms of profitability.

The price of shares in the bank was showing a gain of 2.62 percent to 47.04 euros in mid-morning trading. The overall market as measured by the CAC 40 index was showing a fall of 0.05 percent.

Managing director Jean-Laurent Bonnafe said that BNP Paribas had "stood up well" while getting ready for the application of new capital rules known as Basel III.

The bank had reduced its risk-weighted assets by 10.0 percent or by 62 billion euros and had a ratio of core capital to loans of 9.9 percent at the end of 2012.

He said that the return on shareholders' funds of 8.9 percent last year needed to be improved in coming years.

To achieve this, the bank would invest 1.5 billion euros over three years from 2013 to raise efficiency and save 2.0 billion euros in a full year from 2015.