BNP Paribas posts quarterly loss of €1.4bn
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French bank BNP Paribas said Monday it expected a fourth-quarter loss of €1.4 billion, its first time in the red for a decade. The French bank is expecting a 2008 net profit of €3 billion.
AFP - French banking giant BNP Paribas said on Monday it expected a 2008 net profit of three billion euros (3.9 billion dollars) and was seeking to raise fresh capital of 5.1 billion euros.
In 2007, the group posted a net profit of 7.8 billion euros.
Since then, the global financial crisis has ravaged the banks and BNP said it expected a fourth-quarter loss of 1.4 billion euros, its first time in the red for some 10 years.
According to previously published figures, its third-quarter net profit plunged 55 percent from a year earlier to 901 million euros.
BNP said the fourth-quarter loss reflected "exceptionally violent movements on the capital markets, especially the stock markets," which resulted in losses of two billion euros at its finance and investment unit.
It said it would seek fresh capital by issuing preference shares under the French government's second slice of funding for the financial sector which would raise its key Tier One capital ratio to about 8.0 percent of core capital to mainline risk.
Half of the funds raised would be used to repay earlier government aid.
Capital ratios are a measure of a bank's overall financial health, setting liabilities against their readily available capital.
BNP's full 2008 results will be published on February 18.
In mid-morning trade on the Paris stock exchange, BNP shares were up nearly five percent at 22.43 euros in a slightly firmer overall market.
Despite the gains, analysts said the figures given were disappointing and at the low end of forecasts.
"These figures are below our estimates," Natixis analysts said in a note.
Whilst expected to be negative, the "results are very much at the low end of forecasts and reflect a clear downturn in trends compared with its direct competitors who are showing some signs of recovery," they added.
Pierre Chedeville of CM-CIC Securities noted however that BNP was "one of the world's most profitable banks in 2008 and should be able to avoid having to raise fresh capital in the short- and medium-term."
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