French bank beats profits forecast

BNP has been helped by its strength in retail banking

French bank BNP Paribas is riding out the economic downturn better than many observers expected thanks to a strong performance from its retail operations, new figures have shown.

For the first three months of 2002, the bank made a net profit of 1.02bn euros ($930m; £635m), down 18.6% on the same period last year, but up on the previous three months and ahead of analysts' expectations.

Investors welcomed the figures, pushing shares in BNP 2% higher to 58.75 euros by 1245 GMT.

The move made BNP a star performer on the French market, with most shares falling on Tuesday in response to weakness at media giant Vivendi Universal and a poor showing in the US overnight, .

Strength in breadth

The key to BNP's results, analysts said, was a record performance in retail banking, where net profits rose 5.5%, and private banking, which recorded a 9.3% rise in pretax profits to 248m euros.

BNP's investment banking side suffered a 25% fall in pretax profits.

The diversified nature of BNP and other French banks - with strength in retail as well as in corporate banking - means they have tended to perform better than rivals such as UBS and Deutsche Bank.

"If you look at the figures compared with the fourth quarter, they look quite solid, with revenues up and costs down," said UBS Warburg analyst Nick Dove.

"I think there is still scope for earnings upgrades as the year progresses."