Groupe Paribas Posts Big H1 Profit

Amid considerable turmoil in the banking sector, the company also stressed that there was no reason why it could not forge ahead on its own and saw no reason to seek a "mega-merger".

Paribas revealed a net attributable profit of 4.042 billion francs for the first six months of the year, versus 609 million francs at the same stage last year.

Banque Paribas produced a net attributable profit of 1.274 billion francs, versus 124 million last time, and the group's results were also bolstered by capital gains of 2.958 billion francs, versus 358 million, from Paribas Affaires Industrielles.

Chairman Andre Levy-Lang said the profit jump was a step in the right direction but the second half was unlikely to be as strong because it was traditionally less lucrative in capital markets and the big capital gains had come in the first half.

 

Although he was cautious about the second half matching the first, Levy-Lang said the overall positive trend was continuing for banking activities globally.

"We are convinced, and I think our results in the first half prove it, that Paribas can succeed on its own. We have the means to succeed alone," Levy-Lang said.

Questioned by reporters on the possibility of a tie-up with Societe Generale or state bank Credit Lyonnais -- a subject of market talk in recent months -- Levy-Lang said Paribas was both big and balanced enough enough to stay single. "Paribas is more than ever a banking group active in two main fields, international banking on one hand with Banque Paribas, and financial and retail services on the other," he said.

There was this factor and the fact that Paribas was already a good size, he said. "All that means we do not need to get into a mega-merger." Levy-Lang also said the problems caused by the collapse of the property market at the start of the 1990s were behind it. The group's groups heavy involvement in property, like many other financial groups, cost it 10 billion francs in provisions over five years since the start of the 1990s.

In 1995 alone, the weight of exceptional provisions plunged it to a loss of just less than four billion francs. On the capital gains side, the big deals which produced the

profits from Paribas Affaires Industrielles included the sale of a 16 percent stake in Audiofina, the placing of 25 percent of Axime on the stock exchange, the sale of a first slide of Poliet and a share offer by Canal Plus to buy UGC-DA audiovisual rights company.

Banking analysts polled by Reuters at the start of the bank results season had forecast a profit of two billion to four billion francs but stressed that the predictions were of limited value given that the results would include a number of major capital gains.