Aug. 4 (Bloomberg) -- BNP Paribas SA, which helped trigger a global credit seizure a year ago this week, has emerged from the crisis as France's healthiest bank.

France's largest bank by market value halted withdrawals last Aug. 9 from three funds invested in subprime debt. The move spooked financial markets and came hours before the European Central Bank opened a 94.8 billion-euro ($148 billion) line of credit to encourage banks to lend to each other again. It took 30 mathematics experts three weeks to revalue the funds' holdings.

Now, when the Paris-based bank announces second-quarter results this week that may show a third straight earnings decline on lower trading and asset-management revenue, the results will probably be better than those of its biggest rival, Societe Generale SA, and its subprime-related writedowns less than those at Societe Generale or Credit Agricole SA.

``They're not completely immune, but they generate better results than their rivals,'' said Cyril Meilland, a London-based analyst at Lehman Brothers Holdings Inc. who has an ``overweight'' rating on BNP Paribas. ``Their capital basis, even if it's a bit stretched, has resisted better than others.''

BNP Paribas dropped 2.03 euros, or 3.3 percent, to 59.50 euros in Paris trading, valuing the bank at 53.9 billion euros. The stock has fallen 20 percent this year, less than the 36 percent declines in Societe Generale and Credit Agricole.

Monoline Culture

BNP Paribas, led by Chief Executive Officer Baudouin Prot, 57, will probably say second-quarter profit fell 33 percent to 1.52 billion euros from 2.28 billion euros a year earlier, according to the median estimate of 13 analysts surveyed by Bloomberg News. It may report 475 million euros in further writedowns, while risky-loan provisions probably jumped to 590 million euros from 258 million euros a year earlier.

French banks, including BNP Paribas, ``are especially exposed to monolines,'' said Pierre Chedeville, an analyst at CM- CIC Securities in Paris who rates the shares ``buy.'' ``They were very prudent, and they have reinsured a lot.''

BNP Paribas has taken 2 billion euros of writedowns and risk provisions linked to the subprime crisis, less than half the 4.3 billion euros written down by Societe Generale, France's second- largest bank, and the 5.5 billion euros at Credit Agricole. Credit Agricole may take another 1.2 billion-euro writedown on subprime investments made by its investment banking unit, Calyon, when it announces results this month, Guillaume Tiberghien, a London-based analyst at Credit Suisse Group, wrote in a July 8 note to investors.

Societe Generale

Corporate and investment-banking pretax earnings at BNP Paribas may have fallen 77 percent to 285 million euros in the second quarter, while profit at the asset-management unit, where the three funds were temporarily put on ice last year, probably dropped 18 percent to 474 million euros, according to the survey.

``It's surprising, they've resisted very well,'' said Chedeville. ``They spent all of last summer calling clients to reassure them.''

BNP Paribas's second-quarter earnings will probably drop less than those of Societe Generale, which is reorganizing its investment banking unit after a record 4.9 billion-euro loss from unauthorized trades blamed on former trader Jerome Kerviel.

The Paris-based bank named a new CEO in May, Frederic Oudea, 45, to replace Daniel Bouton, 58, who is staying on as chairman. It plans to spend at least 100 million euros over two years to bolster risk control, and appointed Michel Peretie, former European head of Bear Stearns International Trading, to run investment banking.

Kerviel, 31, who has admitted to trading without permission and faking documents, is under investigation for breach of trust and hacking into the bank's computers to execute and hide trades. Kerviel claims his superiors knew about his trading.

Toxic Assets

Societe Generale will probably say second-quarter net income dropped 69 percent to 550 million euros, according to the analysts surveyed by Bloomberg. It will probably show a loss at its investment bank, compared with a profit a year earlier, the estimates showed. The bank reports earnings tomorrow, a day before BNP Paribas.

``Management and staff have focused on dealing with the impact of the unauthorized trading losses,'' and that probably hurt results, said Jean-Pierre Lambert, a London-based analyst at Keefe, Bruyette & Woods Ltd., who rates Societe Generale ``market perform.'' ``It will take a few quarters before we can assess the full impact of recent events on the franchise.''

Societe Generale may also announce writedowns of about 760 million euros in the quarter, excluding adjustment on debt and credit-default swaps, while risk provisions probably rose to 354 million euros from 186 million euros a year earlier, according to the estimates.

BNP vs SocGen

``The arrival of a new management at the head of SocGen's corporate and investment bank may trigger a books-cleansing operation,'' said Herve Samour-Cachian, who helps oversee about 375 billion euros at Natixis Asset Management in Paris. ``BNP Paribas has a residual exposure to toxic assets that's smaller compared with other French banks.''

Not everyone prefers BNP Paribas to Societe Generale.

``Based on a combination of valuation, expectations and capitalization, we believe that Societe Generale offers a relatively attractive risk-reward and would recommend investors switching out of other French banks into Societe Generale,'' Goldman Sachs Group Inc. analysts wrote in a July 30 note.

To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fbenedettiva@bloomberg.net.

Last Updated: August 4, 2008 12:16 EDT