BNP Chief Executive Prot Doesn't Expect Defaults From European Countries
BNP Paribas SA Chief Executive Officer Baudouin Prot said he doesn’t expect the Greek fiscal crisis to spread and that investors’ concerns over potential losses at European banks risk are “totally overdone.”
“Those who are anxious about the euro zone are wrong,” Prot said in a presentation in Paris today and broadcast on the company’s website. “Greece is an exception. Greece has been tackled. For the rest of European countries, my experience is that any idea of any European countries defaulting is not on the agenda.”
Concern that Europe’s sovereign-debt crisis may spread sent the euro to a four-year low against the dollar on June 7 and has wiped out more than $4 trillion from global stock markets this year. Investors worldwide have little confidence in Europe’s efforts to contain its debt crisis, according to a quarterly poll of investors and analysts who are Bloomberg subscribers.
Investors had “a big overreaction to the reality of the European economy,” Prot said. “It is absolutely unjustified to consider that European banks altogether carry potential heavy losses.”
BNP Paribas, the largest bank by deposits in the 16 countries sharing the euro as a currency, said last month that it holds 5 billion euros ($6 billion) of Greek government debt, and the CEO repeated today the lender is committed to keeping those holdings.
“If there’s something happening” in Greece “you know the numbers,” Prot said. “We’re not going to be immune, but it’s not going to change in any way the fate of BNP Paribas,” he said, referring to the bank’s holdings of Greek sovereign debt.
BNP Paribas’s main consumer-banking markets in the euro region are France, Italy, Belgium and Luxemburg. In the first quarter, the Paris-based lender generated 70 percent of its consumer-banking revenue from these four markets, Prot said.
As for the corporate- and investment-banking unit, Prot said market movements in recent weeks have “not been very supportive for the business.” He didn’t provide any monthly figures.
BNP Paribas is focusing on integrating Fortis banking assets acquired last year and the French bank is “perfectly on track if not ahead” of a plan to generate 900 million euros of cost savings and revenue gains by 2012, Prot said.
“I don’t think that we are in a very acquisitive mood,” the CEO said. “I don’t think it’s time to go for anything else.”
Prot also said that 2009 was a “peak” for the group’s overall provisions for bad loans.
BNP rose as much as 2.8 percent to 43.51 euros and was at 43.38 euros as of 1:07 p.m. in Paris trading.