Paris: BNP Paribas said on Wednesday its net profit slumped 21% in the first quarter as its retail banking activities in the United States were hammered amid the global economic downturn.
Paris-based BNP Paribas, the euro zone’s largest bank by deposits, said net profit fell to €1.56 billion ($2.08 billion) in the first quarter, down from euro1.98 billion a year earlier.
Earnings slumped despite a 28% increase in revenue during the quarter, as BNP Paribas’ investment banking division reported a near tripling of its revenue in the quarter from a year earlier.
BNP Paribas’ retail banking businesses outside of its main French and Italian markets were among the bank’s hardest hit divisions in the quarter, especially its US retail bank BancWest, which had a pre-tax loss of €29 million in the quarter compared to a profit of €151 million a year earlier.
The bank, whose shares have risen nearly 40% so far this year, said it has launched a €100 million cost-cutting program at San Francisco-based BancWest after operating expenses rose 3.3% in the quarter.
In a statement, the French bank blamed the “continued deterioration of the economy and strong persisting turbulence in financial markets” for the first quarter performance.
BNP Paribas’s stock closed Tuesday up 1% at €42.22.