BNP Paribas SA, France's largest bank, reported Friday a 52 percent decline in fourth-quarter profit, missing analysts’ estimates, due to the writedown of its Italian unit. The bank also pledged to restructure its investment banking business to boost profits.
Net income fell to 665 million euros ($744 million) from 1.38 billion euros ($1.54 billion) a year earlier, the Paris-based company said. Analysts, on average, were expecting the firm to earn 864 million euros ($966.8 million), according to Bloomberg.
The bank also said it would scale back risk-weighted assets at its investment banking unit by 20 billion euros ($22.38 billion) by 2019 by reducing “unproductive assets” with a goal to generate 1 billion euros ($1.12 billion) in cost savings by that time. The target is to achieve average annual growth of 4 percent for investment banking revenue between 2015 and 2019, the company said in a statement, announcing its results.
Earlier this week, reports emerged that BNP planned to simplify the legal structure of its wealth management operations in France and some countries in Asia.
BNP’s cost cuts followed a broader trend by large European banks, to downsize their non-core operations as compliance and regulatory costs weigh on profitability targets while bearish markets scuttle new growth.
Swiss bank Credit Suisse Group reported plans to slash 4,000 jobs Thursday, following similar moves by Deutsche Bank, UBS Group and Barclays.
BNP’s stock has lost more than 20 percent of its value since the beginning of the year.