* Net income down 45 percent in lacklustre economy
* Analysts had expected bigger drop in profits
* BNP is pushing to optimise costs at retail bank -CEO
* ECB rate cut a "positive" sign -CEO
By Lionel Laurent and Matthias Blamont
PARIS, May 3 French bank BNP Paribas
pledged to keep cutting costs and staff amid a lacklustre
economic environment after reporting a 45 percent drop in
first-quarter net income on Friday.
France's No. 1 listed bank, which is heavily exposed to the
recession-hit euro zone, is in the early stages of a plan to
save 2 billion euros ($2.6 billion) annually by 2015.
"We are improving the efficiency of the retail business in
France, tackling the cost base," BNP Chief Executive
Jean-Laurent Bonnafe told Reuters Insider television.
"We are optimising all dimensions."
Other European lenders such as Germany's Deutsche Bank
and Switzerland's UBS are also in a push to
cut costs and strengthen balance sheets in the face of tough
post-crisis financial markets and a regulatory crackdown on bank
BNP said it had begun offering "early-retirement" plans for
staff at its Belgian and Italian subsidiaries, without giving
The bank is also preparing to launch a wholly online
European bank to try and offset slowing growth at its retail
branches. Union sources have said the bank is targeting 500,000
customers over five years.
BNP said its first-quarter earnings had fallen 44.8 percent,
to 1.58 billion euros ($2.1 billion), on the back of weakness in
its domestic market and the rocky impact of the EU's bailout of
Cyprus on financial markets.
This was not as bad as analysts' expectations for 1.53
billion euros in net profit, according to an average of analyst
forecasts compiled by Thomson Reuters I/B/E/S.
Revenues from capital-markets trading and sales, which are
heavily geared towards bonds, other fixed-income products and
currencies, fell 25.2 percent year-on-year.
Praising the European Central Bank's decision on Thursday to
cut interest rates, CEO Bonnafe said that it would spur growth
without being a cure-all.
"(The rate cut) is a positive sign. It will not be an answer
to all issues but it will be a good help to the economy," he
BNP could also end up being a buyer of the state of
Luxembourg's 34-percent stake in its BGL subsidiary, added
Bonnafe, without giving further details.
Luxembourg, which took a stake in the unit as part of BNP's
takeover of collapsed Benelux bank Fortis in 2008, said last
month it wanted to sell the stake.
($1 = 0.7649 euros)
(Editing by Edwina Gibbs)