Big French bank slashes exposure to euro debt
Source: Agencies |
November 4, 2011, Friday
|
Print Edition
Print Edition
FRANCE'S biggest listed bank, BNP Paribas, has slashed its exposure to Greece, Italy and Spain by more than 12 billion euros (US$16.6 billion) in the third quarter, contributing to a 72 percent slide in earnings.
BNP wrote down 60 percent, or 2.26 billion euros, of its sovereign exposure to the crisis-hit Greek economy, reflecting last month's pledge from private sector creditors to write off a bigger chunk of their Greek debt, the bank said in a statement, though it added the plan was still "shrouded by uncertainty."
But even more striking was its move to cut its exposure to Italy - which the bank has always insisted was coping with its debt crisis - by 8.3 billion euros, or 40 percent, and to Spain by 2.2 billion euros, or 81.5 percent.
A London-based analyst said: "It was a surprise, but it means much less peripheral sovereign debt and that is going to be taken well by the market."
BNP Chief Executive Baudouin Prot said a Greek sovereign debt default would be "unpleasant" but manageable.
He said the sovereign debt sell-off was a response to regulators' demand that banks define their holdings according to market values.
Meanwhile, Dutch financial services group ING Group said it would cut 2,700 jobs at its Dutch banking operations to cope with a deteriorating market.
BNP's big balance sheet, its dependence on wholesale funding markets and its overwhelming European exposure make it among the most vulnerable to the eurozone's sovereign debt crises.
Following a 45 percent share-price drop since the end of June, the bank has announced sweeping asset sales that will be accompanied by job cuts, mainly at its investment bank.
Prot said: "We will have some staff reductions as we implement the deleveraging plan."
Banks such as JPMorgan Chase and Credit Suisse are shedding jobs worldwide as stricter regulations and a tough trading environment take their toll on investment banking units in particular.
Disposals and the reduction in US-dollar funding needs - down by US$20 billion in the third quarter and due to go down by the same amount in the fourth - will lead to one-off losses of 1.2 billion euros, BNP said.
BNP wrote down 60 percent, or 2.26 billion euros, of its sovereign exposure to the crisis-hit Greek economy, reflecting last month's pledge from private sector creditors to write off a bigger chunk of their Greek debt, the bank said in a statement, though it added the plan was still "shrouded by uncertainty."
But even more striking was its move to cut its exposure to Italy - which the bank has always insisted was coping with its debt crisis - by 8.3 billion euros, or 40 percent, and to Spain by 2.2 billion euros, or 81.5 percent.
A London-based analyst said: "It was a surprise, but it means much less peripheral sovereign debt and that is going to be taken well by the market."
BNP Chief Executive Baudouin Prot said a Greek sovereign debt default would be "unpleasant" but manageable.
He said the sovereign debt sell-off was a response to regulators' demand that banks define their holdings according to market values.
Meanwhile, Dutch financial services group ING Group said it would cut 2,700 jobs at its Dutch banking operations to cope with a deteriorating market.
BNP's big balance sheet, its dependence on wholesale funding markets and its overwhelming European exposure make it among the most vulnerable to the eurozone's sovereign debt crises.
Following a 45 percent share-price drop since the end of June, the bank has announced sweeping asset sales that will be accompanied by job cuts, mainly at its investment bank.
Prot said: "We will have some staff reductions as we implement the deleveraging plan."
Banks such as JPMorgan Chase and Credit Suisse are shedding jobs worldwide as stricter regulations and a tough trading environment take their toll on investment banking units in particular.
Disposals and the reduction in US-dollar funding needs - down by US$20 billion in the third quarter and due to go down by the same amount in the fourth - will lead to one-off losses of 1.2 billion euros, BNP said.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
