The world’s financial markets remain “exceptionally volatile” owing to the subprime credit crisis, the chief executive officer of France’s largest bank said in Hong Kong yesterday.
“Since I last presented to the market at the end of February, the environment remains very challenging and the market exceptionally volatile,” Baudouin Prot of BNP Paribas told reporters.
UNCERTAINTY
“Then, through most of March, we saw a worsening of the crisis, with extreme and unprecedented volatility expanding to new asset classes,” he said.
“This has created a very adverse trading environment,” Prot said.
Despite the uncertainty, Prot said BNP was aiming to repeat last year’s record revenues this year. Last year the bank earned a net profit of 7.8 billion euros (US$11.6 billion).
“It is becoming more and more challenging to try to repeat these revenues ... But overall we remain still confident,” he said at an event to celebrate the bank’s 50th anniversary in Hong Kong.
GREATER CHINA
Prot said that the bank was aiming to triple its revenue from its mainland China operation in the next three years and double its revenue from its operations in greater China, including Taiwan and Hong Kong.
BNP, the biggest French bank by market capitalization, has a limited direct exposure to derivatives tied to subprime lending, where high-risk homeowners in the US were given large mortgages, Prot said.
The weakness of those derivatives has sparked global turbulence in markets since last August, as financial institutions tightened credit conditions in the light of defaults on the home loans.
Prot would not comment on why BNP had decided against making a bid for fellow French bank Societe Generale, which is a potential takeover target after reporting a 4.82 billion euro loss from unauthorized trades by one of its dealers.
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