PARIS (AP) -- French bank BNP Paribas suffered a 50 percent slump in the fourth quarter net profits as Europe's financial crisis intensified last autumn and slashed the value of its holdings of Greek government bonds.
The Paris bank, one of Europe's largest financial institutions, said in a statement Wednesday it suffered a euro567 million ($747 million) hit to its bottom line after accounting for expected losses on its Greek bonds in line with a European agreement that aims to cut Greece's debt burden and finally halt the crisis.
After accounting for the Greek bond losses, BNP Paribas made a net profit of euro765 million in the three months to Dec. 31, down from euro1.55 billion a year earlier, the bank said.
BNP Paribas shares rose on the news as investors took comfort that earnings hadn't fallen even more steeply. At 1000 GMT, the stock was up 5.5 percent at euro35.35.
To offset the ongoing crisis, BNP Paribas said it had slashed its holdings of sovereign debt by over a quarter and shrunk its medium- and long-term dollar financing needs by $53 billion, while boosting its loss provisions to cover a full 75 percent of its total exposure to Greek government debt.
BNP Paribas CEO Jean-Laurent Bonnafe called the bank's performance "solid" despite "an economic and regulatory environment undergoing radical changes."
The bank is now well positioned thanks to its lower exposure to Greek and other sovereign debt, smaller dollar financing needs and reinforced capital cushion, Bonnafe added.
The bank made an annual euro6 billion net profit, down 23 percent from 2010, while revenue slipped 3.4 percent to euro42.4 billion. Retail banking saw profits surge despite flat revenue as French savers boosted deposits and the bank's cost of risk diminished. The corporate and investment banking division bore the brunt of volatile markets, seeing its profit nearly wiped out entirely in the fourth quarter, leaving earnings down by a third for the year as a whole.
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