* Aims to save 2 bln euros annually with three-year plan
* Shares rise 2.9 pct
* CEO sees weak growth in Europe this year
* Quarterly profit falls by a third, below expectations
(Adds fund manager comment, SocGen share price)
By Lionel Laurent and Matthias Blamont
PARIS, Feb 14 BNP Paribas said a
three-year efficiency drive would bring annual cost savings of 2
billion euros ($2.69 billion) and it would ramp up growth in
Asia after fourth-quarter profits were hit by Europe's weak
BNP is relatively robust and well-capitalised after spending
a year paring its balance sheet and reducing holdings of risky
eurozone sovereign debt.
But France's biggest listed bank is still heavily exposed to
mature European markets and is under pressure to show investors
new paths to growth.
BNP said on Thursday the savings would come from simplifying
its reporting structure and investing in better technology,
which would cost a total of 1.5 billion euros. It said none of
its businesses would be shut down.
The announcement lifted BNP's shares 2.9 percent,
outperforming a flat STOXX Europe 600 banks index and
offsetting the bank's weaker-than-expected quarterly results.
Investors penalised its arch-rival Societe Generale, which
posted a fourth-quarter loss on Wednesday without giving a
target for cost cuts. SocGen shares fell 3.4 percent.
"BNP has an attractive story for the market now," said Yohan
Salleron, a fund manager at Mandarine Gestion in Paris. "It's
going to be hard to offset weakness in Europe in the short
term... But at least we are being given a long-term plan."
BNP said it was eyeing expansion in Asia, where it wants to
lift revenue from investment banking and its asset-gathering
Investment Solutions division to over 3 billion euros ($4
billion) by 2016 from 2 billion in 2012. It also plans to hire
1,300 people in the region through to 2015.
"We see a low-growth scenario in Europe (in 2013)," BNP
Chief Executive Jean-Laurent Bonnafe told Reuters Insider
television. No acquisitions were planned for now, he said.
Like SocGen, BNP has avoided the kind of radical job cuts
and product exits seen at Switzerland's UBS and
Britain's Barclays. Analysts say it could lift pre-tax
profits by 15 percent if its cost plans are successful.
A union source had flagged BNP's cost drive last month,
without saying how much it planned to save.
ITALIAN TROUBLE SPOT
BNP reported a one-third drop in net profit for the fourth
quarter of 2012, to 514 million euros. Analysts had been
expecting closer to 1.0 billion, according to a Thomson Reuters
I/B/E/S average forecast.
Among the trouble spots were Italy - where BNP took a 300
million-euro goodwill writedown on its BNL subsidiary in an
effort to raise its capital strength - and investment banking,
where a rebound in revenues was hampered by a rise in loan
losses tied to one unidentified loan.
BNP said it would propose a cash dividend of 1.50 euros per
share and said its focus on balance-sheet strength in 2012 had
lifted its Basel III Core Tier 1 Ratio to 9.9 percent in
December from 8.9 percent in June.
Asked whether BNP might seek to grow in Italy with an
investment in scandal-ridden bank Monte Paschi, BNP's
Bonnafe said no acquisitions were planned and that BNP had never
been contacted on the subject of Monte Paschi.
Half of BNP's planned 2 billion-euro savings will come from
retail banking, where cuts are seen as long overdue now that an
economic slowdown and state austerity measures have started to
hit core markets like France.
Profits at the bank's French, Belgian and Italian retail
operations fell in the fourth quarter, with growing loan losses
in Italy almost halving BNL's earnings before tax.
The French economy shrank 0.3 percent in the final three
months of 2012, preliminary national figures showed on Thursday,
as companies cut back on investment and exports flagged.
Italy's economy also contracted more than expected,
extending the longest recession in 20 years.
A third of the savings will come from BNP's corporate and
investment bank, which has borne the brunt of cuts since a
flare-up in the euro zone crisis in 2011 pushed once-cheap
market funding out of its reach.
The unit will focus on growth in the United States and Asia
and will further develop its fixed-income platform after a boom
year for bond markets.
Asked whether the savings could be made without cutting
jobs, BNP's Bonnafe said: "We'll see". He said that the bank was
always monitoring staffing levels and would prioritize moving
staff to other divisions over straight reductions.
($1 = 0.7442 euros)
(Editing by Helen Massy-Beresford and Tom Pfeiffer)