France's biggest listed bank, BNP Paribas, beat most expectations despite a 21 per cent fall in first-quarter net profit today as growth at its retail bank cushioned a plunge at its investment bank.
First quarter net profit fell to €1.981 billion ($3.1 billion) as BNP Paribas' investment banking division made a €514 million writedown due to the impact of the credit crunch. The result beat an average net profit forecast of €1.675 billion from analysts.
Gross operating profit fell 23 per cent to €2.79 billion, below an average forecast of €2.89 billion.
Shares were up 3.2 per cent at €69.66 in early afternoon trade as analysts welcomed the results. The stock was among the top gainers on France's benchmark CAC-40 index which was up 0.4 per cent.
BNP's fall in earnings was smaller than that announced this week by French rival Societe Generale, which reported a 23 per cent drop in net profit.
European rivals such as Deutsche Bank, UBS and Credit Suisse have posted first-quarter losses as the global financial sector still reels from the effects of losses in the US subprime mortgage market.
Today, European banks ING and Dexia also published lower first quarter profits. France's biggest retail bank Credit Agricole said earlier this week it would report a 66 per cent fall in its first quarter net profit.
BNP Paribas said its first quarter performance showed the company's resilience.
The French company's retail banking profits were boosted by higher earnings at its Italian bank BNL and in emerging markets such as Turkey and Egypt. Its French retail bank also had a 7 per cent rise in profit as it won new customers.
Its investment banking writedowns included an €86 million writedown on a leveraged buyout underwriting portfolio, €103 million on securitisations and €182 million on monoline insurers.
It made a further €143 million of credit adjustments on other counterparties.