Mal Langsdon/ReutersBNP, based in Pairs, said it reached its capital target early.
PARIS — BNP Paribas, the largest French bank, said on Wednesday that its net income more than doubled in the third quarter, lifted by a strong performance in its investment banking unit.
Profit rose to 1.3 billion euros ($1.7 billion) in the three months that ended Sept. 30 from 541 million euros a year earlier. The corporate and investment banking unit posted a pretax profit of 732 million euros, up 7.3 percent, as the fixed-income and equity and advisory segments performed well.
The bank noted that results were flattered by comparison to the year-earlier period, when a sovereign debt crisis in Greece and other countries had a significant effect on results of European banks, as American money market funds reduced loans to the region.
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The bank said it had reached its capital adequacy targets ahead of schedule, as BNP and its rivals have worked to secure their balance sheets by selling dollar-financed assets and cutting exposure to euro zone countries that the market considered risky.
BNP’s corporate and investment banking division cut its risk-weighted assets by 45 billion euros, compared with the third quarter of 2011.
Ian Langsdon/European Pressphoto AgencyJean-Laurent Bonnafé, the chief executive of BNP Paribas.
Aggressive action by the European Central Bank, which has promised to purchase bonds to limit government borrowing costs, has also helped to restore a relative sense of calm to the euro zone.
BNP said that at the end of September it had a 9.5 percent Basel III common equity Tier 1 ratio, a measure of a lender’s ability to weather financial shocks, exceeding its 9 percent target. The figure puts BNP Paribas ahead of many of its global peers.
Jean-Laurent Bonnafé, chief executive of BNP, said the results showed its “resilience in a challenging economic environment,” adding that it was now “one of the best capitalized amongst the leading global banks.”
BNP’s overall revenue fell 3.4 percent, to 9.7 billion euros, dragged down by a 774 million-euro charge connected to the value of its own debt.
Adjusted for one-time costs, the bank’s results surpassed market expectations. Jon Peace, a banking analyst at Nomura International in London, told investors in a research note on Wednesday that BNP’s success in meeting its capital targets early created “expectations for a decent cash dividend payout for 2012.”
Shares of BNP, which is based in Paris, rose 1.07 percent to $39.54 on Wednesday.
Last month, the ratings agency Standard Poor’s cut BNP’s credit rating by one notch.
The agency warned that the French financial sector faced growing risks from the weakness in the euro zone and the possibility that French real estate prices would decline.
The rating reduction puts BNP’s rating in line with those of its French rival Société Générale, which will report earnings Thursday, and with other global lenders like JPMorgan Chase and HSBC Holdings.
Article source: http://dealbook.nytimes.com/2012/11/07/b-n-p-paribas-profit-doubles-in-third-quarter/?partner=rss&emc=rss
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