* To hire hundreds of staff, chase client deposits in
* Q2 net income down 4.7 pct, a smaller-than-expected drop
* Italy loan losses, investment-banking weakness weigh
* BNP seeing "signs of improvement" in Europe -COO Bordenave
* Not seeking acquisitions, "no need" to raise capital
By Lionel Laurent and Matthias Blamont
PARIS, July 31 French bank BNP Paribas
unveiled a plan to boost its presence in relatively resilient
Germany on Wednesday, after fresh cost cuts failed to offset
sliding earnings in markets like Italy in the second quarter.
The plan will see BNP, the euro zone's biggest bank by
market value, hire hundreds of staff over the next three years
and chase client deposits online without building a branch
BNP derives more than half its annual revenue from its core
French, Italian and Belgian markets. The euro zone's woes are
pushing the bank to chase growth in markets like Asia and the
U.S., as well as Germany, while stepping up cost savings.
While cost cuts helped bring expenses down in the second
quarter, they were not enough to avert a 4.7 percent drop in
quarterly net income to 1.76 billion euros ($2.33 billion), hurt
by rising loan-loss provisions in Italy and investment-banking
weakness. BNP's revenue also fell 1.8 percent to 9.92 billion.
This was a smaller-than-expected drop, however. Analysts had
been expecting 1.51 billion euros in net profit and 9.84 billion
in revenue, according to the average of forecasts compiled by
Among one-off items in the quarter was a 218 million euro
gain from the sale of a "bad-bank" portfolio of toxic assets
that once belonged to Fortis, a Benelux bank bought by BNP in
the midst of the 2008 financial crisis.
BNP Chief Operating Officer Philippe Bordenave said there
were already signs of improvement in Europe but that they would
only fully become visible in the second half of 2013.
"We are seeing early signs of improvement but...it will be
more in the second part of the year," he told Reuters Insider.
Commenting on the outlook for loan-loss provisions, he
added: "We are relatively confident as far as France and Belgium
are concerned...in Italy, it may be somewhat more difficult."
Italy has been in recession since mid-2011 and its
government does not see a return to growth before the fourth
quarter of this year.
BNP is not seeking acquisitions and does not need to raise
capital as its balance sheet is "rock solid", Bordenave said.
($1 = 0.7547 euros)
(Editing by James Regan)