PARIS (AFP) - BNP Paribas, France's largest bank, reported higher-than-expected net profit for the third quarter but warned that rising oil prices had helped cause a deterioration in its markets during the period.
The bank reported third-quarter net profit of 1.101 billion euros (1.41 billion dollars), a rise of 13.5 percent from a year earlier, as a dip in risk provisions surpassed analysts' best hopes.
Analysts polled by AFP's financial news wire AFX had expected net profit of between 917 million euros and 1.035 billion euros.
BNP itself had cited a market consensus at about one billion euros.
Risk provisions accelerated the trend of the second quarter, falling some 70 percent from last year to 116 million euros. That was underpinned by an unexpected net writeback of provisions totalling 27 million euros in Corporate and Investment Banking (CIB).
The surprise provisions writeback meant operating profit rose over 45 percent to 597 million euros in the quarter. Pretax income was up 21.6 percent at 607 million.
BNP chief executive Baudouin Prot said the group's performance reflected a sales and marketing drive as well as cost-control efforts.
"It must however be noted that the environment in which these performances occurred started to deteriorate during the third quarter due to the sharp rise in oil prices, the slowdown in economic growth in Europe and lacklustre financial markets," he said in a statement.
Group net banking income rose 3.4 percent to 4.531 billion euros while administrative costs were up 1.4 percent to 2.82 billion euros.
Retail banking saw quarterly net banking income rise 3.2 percent to 2.518 billion euros while declining provisions helped spur a 13.9 percent rise in pretax income to 779 million euros.
Within that, French retail banking saw revenues rise 4.0 percent in the quarter to 1.284 billion euros, while pretax earnings climbed 6.5 percent to 343 million euros.
As analysts had hoped, BNP has increased its loan exposure in the division with all loans outstanding up 10.4 percent from a year earlier.
Over nine months, annualised return on equity was at 17.7 percent after tax, a 3.6 point rise over the same period in 2003.
Investors sold off the stock in a bout of profit taking and on concern that the results were based too heavily on the writeback of provisions, traders said.
Shares in BNP were off 1.74 percent at 53.60 euros in midday Paris trading, while the CAC 40 index was down 20.71 points at 3,749.22 points.
Dresdner Kleinwort Wasserstein downgraded its rating on BNP Paribas to "hold" from "buy" on an assumption that earnings growth will be tough in 2005.
11/04/2004 - 12:45 GMT - AFP