Bad debt charge hits BNP profits

BNP's bad debt provisions were higher than expected

French bank BNP Paribas has seen its quarterly profits more than halve following an increase in its charges linked to the credit crisis.

Net profits for the three months to the end of September fell to 901m euros ($1.15bn; £731m), down 55.6% from the same period a year earlier.

The earnings were less than expected as bad debt charges for the quarter increased to 1.992bn euros.

Banks worldwide have been hit by bad debts due to the sub-prime crisis.

"The cost of risk was the main issue and was worse than expected," said West LB analyst Christoph Bossmann.

But he said: "The group's ability to withstand the crisis, the attractiveness of its franchises and its sound financial standing enable it, in an environment that will remain difficult going forward, to grow its business units in order to continue servicing the real economy."

On Monday, competitor Societe Generale reported an 84% fall in third-quarter profits.

France, like other countries, has taken steps to boost its finance sector and restore liquidity into the market.

It recently promised to inject 10.5bn euros into the country's six largest banks.