Business

Friday October 9, 2009

BNP: French banks emerge from crisis


PARIS: The repayment of state support by French banks shows they have emerged from the financial crisis, BNP Paribas chief executive Baudouin Prot told TV show Leaders on channel Public Senat.

French President Nicolas Sarkozy’s chief of staff, Claude Gueant, said all the country’s banks would soon have repaid government help, Le Figaro newspaper reported on Wednesday.

BNP, Societe Generale and Credit Mutuel have paid back or announced plans to repay the support they received during the credit crunch, while Credit Agricole and mutual bank BPCE have not indicated that they would act soon.

“BNP Paribas and all the French banks with it have stopped using the state guarantee…so the French banks, including BNP Paribas, have exited the crisis,” Prot said.

The CEO predicted a gradual recovery in the rest of the economy and a 2% drop in French gross domestic product this year.

SocGen launched a 4.8 billion euros (US$7.1bil) rights issue to repay state support and fund takeovers on Tuesday, a week after BNP said it would tap investors for 4.3 billion.

Belgian-French bank Dexia has said it does not expect to be able to manage without state aid for another year.

The moves by French banks reflect wider efforts in Europe and the United States by banks to take advantage of a pick-up in the stock markets to regain their financial autonomy.

BNP’s Prot praised Sarkozy for his handling of the crisis in the autumn of last year and that it had been touch and go for the banking system.

“We were on the edge of the abyss for several weeks,” he said.

Prot also underscored the fact that it was repaying the state because it could and emphasised that BNP would take decisions on variable executive pay as though it had not yet reimbursed the state.

“It is very important regarding public opinion that it is absolutely clear that BNP Paribas is repaying the state because BNP Paribas is doing well…and that BNP Paribas is not repaying the state quickly because it wants to evade constraints on the distribution of loans or on bonuses,” Prot said. — Reuters


Latest business news from AP-Wire

  • E-mail this story
  • Print this story