BNP second quarter net profit drops 34 percent

French bank BNP Paribas said Wednesday profit and revenue fell for the third consecutive quarter as the global financial crisis continued to weigh on earnings.

The euro zone's largest bank said net profit fell 34 percent to 1.5 billion euros ($2.32 billion) in the April-June period, while revenue fell 8.5 percent to 7.52 billion euros ($11.7 billion).

Speaking at a news conference, Chief Executive Baudoin Prot said the results showed BNP Paribas' strength in coping with the financial industry's "major turbulence" vis-a-vis the bank's competitors.

BNP Paribas "is, along with Goldman Sachs, one of only two investment banks in the world to remain profitable since the start of the crisis" last summer, Prot said.

The bank vaunted the performance of its largest division, corporate and investment banking, which remained profitable despite a fourth consecutive quarter of sliding revenue.

BNP Paribas "lives up to its reputation as one of the most solid banks in Europe," said Isabel Schauerte, an analyst at U.S. financial research firm Celent.

"Thanks to its highly diversified earnings streams, the bank is in a better position to absorb financial market stress than many of its peers," Schauerte said.

Corporate and investment banking, traditionally BNP Paribas' biggest money spinner, saw revenue fall 25 percent to 1.85 billion euros ($2.87 billion) in the second quarter from a year ago, and the unit's pretax profit fell by more than half to 523 million euros ($810 million).

The bank credited its ability to remain profitable despite the crisis to its limited exposure to businesses directly affected by the crisis and the large share of its business in Asia and emerging markets.

BNP Paribas outperformed hometown rival Societe Generale, which Tuesday reported a 63 percent drop in second quarter net profit and a 186 million euros ($288 million) loss in its investment banking division due to what CEO Frederic Oudea called "a crisis on an exceptional scale" in global markets.

Since the start of the crisis last July, BNP Paribas has booked pretax profit of 1.9 billion euros ($2.94 billion), compared with a loss of 6.3 billion euros for Societe Generale and losses of around 25 billion euros ($38.7 billion) for U.S. rivals Merrill Lynch and Citigroup.

BNP Paribas took a 542 million euros ($839 million) hit in the quarter from its exposure to counterparty risk on monoline insurers, about half the 917 million euros ($1.42 billion) in writedowns and one-time charges booked by Societe Generale during the period.

The bank's core domestic retail banking unit continued to grow in the quarter thanks to higher loan making and deposit taking. It reported a 2.7 percent rise in pretax profit to 463 million euros ($717 million)in the second quarter, on 2 percent higher revenue at 1.45 billion euros ($2.25 billion).

BNP Paribas shares were up 5.8 percent or 3.63 euros ($5.62) at 65.45 euros ($101.36) in late morning trade in Paris.

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