Paris : BNP Paribas, France's largest bank, said first-quarter profit rose 9.6 per cent, helped by the sale of a stake in property company Klepierre and a rebound in fixed-income trading revenue.

Net income climbed to €2.87 billion (Dh13.77 billion) from €2.62 billion a year earlier, the Paris-based company said in a statement yesterday. Earnings surpassed the €2.67-billion average estimate of 10 analysts surveyed by Bloomberg.

The bank began trimming its balance sheet last year as capital requirements and funding costs increased. BNP Paribas reiterated that it will reach a 9 per cent common equity Tier 1 ratio under Basel III capital standards by the end of the year as it retains earnings and reduces assets. The March sale of a stake in Paris-based Klepierre led to a €1.8 billion gain in the quarter and will bolster capital.

BNP Paribas "had good operating performance" both in its main consumer-banking markets and in its capital markets business, Chief Executive Officer Jean-Laurent Bonnafe said in the statement. "Solvency is strengthened, the size of the balance sheet has been reduced."

Sovereign bond sales

Excluding one-time items, profit fell 22 per cent to €2.04 billion in the quarter, the bank said. BNP Paribas had an €843-million charge stemming from a rule that requires banks to book a loss if the price of their debt rises. It also recorded €142 million of losses on sovereign bond sales.

BNP Paribas has declined 4.1 per cent in Paris trading this year, compared with a 0.4 per cent gain in smaller French competitor Societe Generale and a 1.5 per cent increase in the 43-company Bloomberg Europe Banks and Financial Services Index.

Shares in European banks, which rallied in the first quarter, spurred by €1 trillion in European Central Bank loans, dropped last month as Spain's worsening economic data revived the continent's debt crisis.

Loans sold as part of deleveraging efforts

BNP Paribas also booked €74 million of losses from selling about €2 billion in loans as part of its corporate- and investment-bank deleveraging efforts, it said.

The company doesn't plan further job cuts at the unit on top of the 1,400 positions it is already eliminating worldwide, Bonnafe said in the interview.

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