BNP Paribas Q3 Net Profit Lifted by CIB, Fortis

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PARIS -(Dow Jones)- French bank BNP Paribas SA (BNP.FR) Thursday said the continuing strong performance of its corporate and investment bank and the acquisition of Fortis Bank Belgium contributed to a 45% rise in third-quarter net profit.

Net profit for the period increased to EUR1.31 billion from EUR901 million a year earlier, beating an average forecast of EUR1.20 billion in a Dow Jones Newswires poll of six analysts.

BNP Paribas, France's largest bank by market capitalization, said that, although the economy remained difficult through much of the third quarter, that financial markets improved significantly.

Revenue from corporate and investment banking was up 43% at EUR2.93 billion, supported by continuing high demand for fixed-income products and derivatives.

Fixed-income revenue was lower than the exceptionally high EUR1.93 billion reported in the second quarter but compares with EUR876 million in the third quarter last year.

Improved market conditions allowed the bank to halve risk provisions at the CIB unit to EUR572 million, contributing to pretax profit of EUR1.24 billion from EUR38 million a year earlier.

Fortis Bank, which BNP Paribas acquired from the Belgian government earlier this year, was included in the bank's full quarterly figures for the first time. It contributed revenue of EUR2.23 billion and added EUR277 million to overall net profit.

Excluding the impact from Fortis, revenue at the bank's core businesses increased 14% to EUR8.63 billion in the third quarter. With Fortis added, total revenue for the period was up 40% at EUR10.7 billion.

French retail banking revenue rose 4.1% to EUR1.53 billion, boosted by net interest income generated by increased deposits.

Commenting on the results, Chief Executive Baudouin Prot said: "Because it is diversified but integrated and focused on customer needs and demands, this business model has turned out to be robust in a time of crisis and capable of generating the capital necessary to play a supporting role in the economic recovery."

BNP Paribas shares closed up 3.5% Wednesday at EUR52.63, rising alongside cross-town rival Societe Generale SA (GLE.FR), which was the first of France's major banks to report third-quarter earnings.

BNP Paribas shares have regained most of the ground they lost earlier this year at the height of the financial crisis. They are up 79% since the beginning of 2009 and stand only 2.3% shy of their year-earlier level.

SocGen said Wednesday that third-quarter net profit more than doubled to EUR426 million as a continuing improvement in market conditions boosted earnings at its corporate and investment bank. Its shares ended the day up 4.6%.

BNP Paribas recently completed a EUR4.3 billion rights issue launched at the end of September to help repay over EUR5 billion in state aid.

It was the first French bank to outline plans to reimburse government funds paid out in the financial crisis. Two tranches of EUR10.5 billion each were offered to help French banks strengthen their capital, the first late in 2008 and the second early this year.

-By Digby Larner, Dow Jones Newswires; +33 1 4017 1748; digby.larner@dowjones.com

(END) Dow Jones Newswires

11-05-09 0226ET