French bank BNP Paribas posted an expected fourth-quarter loss and said market conditions would remain tough in 2009.
France's biggest bank by market capitalisation today reported a net loss of €1.37 billion ($1.73 billion) - in line with guidance given last month for a loss of around €1.4 billion.
It also cut its dividend by 70 per cent from last year to €1 per share. Last year, it made a fourth-quarter net profit of around €1.01 billion.
BNP was hit by losses at its investment banking arm, a 345 million euro exposure to an alleged $50 billion fraud by US financier Bernard Madoff, and by a slump in the economy of Ukraine, where it has operations.
"One of the main points was losses on revenues in equity derivatives," said a London-based analyst, who declined to be named.
BNP said it would cut jobs in Ukraine and close 100 bank branches there. BNP expected market conditions for 2009 to remain very difficult but added it was well-placed to cope with the tough climate.
"I'm comfortable that BNP Paribas will remain largely profitable this year," Chief Executive Baudouin Prot told CNBC television.
Its results were worse than those posted yesterday by French rival Societe Generale.
SocGen reported a fourth quarter net profit of €87 million and increased its dividend by 33 per cent.
However, BNP's losses were not as bad as those suffered by many of its rivals, such as Swiss banks UBS and Credit Suisse which posted fourth quarter losses of 8 billion and 6 billion Swiss francs respectively.
BNP is currently in talks with the Belgian government over trying to find a solution for Fortis, whose shareholders have voted against state-led deals to carve the bank and hand some of its main assets to the French lender.
Following anger in Belgium from Fortis shareholders who felt their stakes were being sold off too cheaply, an initial October deal to carve up Fortis was revised at the start of this year.
Reuters