BNP Paribas has revealed a €5 billion exposure to Greece, the largest among major French banks, as worries over contagion from the debt crisis keep lenders under pressure.
BNP today also posted first-quarter net profits that beat analyst forecasts, thanks to improved market conditions and the integration of Fortis. It said that the economic recovery had begun.
BNP's CEO Baudouin Prot tried to calm fears that the Greek economic crisis could spread.
'All the scenarios for the contagion of the Greek crisis to Spain and Portugal are unfounded,' he said. But he said BNP had also decided not to reveal its exposure to euro zone countries aside from Greece.
The bank pegged its Greek sovereign debt exposure at €5 billion, a day after smaller rival Société Générale said its exposure was €3 billion.
BNP also said today that it had €3 billion in corporate commitments in Greece, mainly with international firms and with risks that had minimal correlation to Greece's economy.
BNP's other major French rival, Credit Agricole, has said its sovereign Greek exposure is €850m. However, BNP does not have a significant banking subsidiary within Greece, and analysts see the group as relatively less vulnerable to the broader Greek economy.
BNP reported first-quarter net profit of €2.3 billion, a 47% rise year-on-year and higher than average forecasts of €1.6 billion.
The bank's capital markets revenues were particularly strong, analysts said, while the equity and advisory unit recorded the best ever quarterly results driven by strength in derivatives.
BNP's good results were also due to lower loan provisions as financial market conditions improved, helping its corporate and investment banking unit squeeze out more profit.
'The first quarter of 2010 has seen signs of the beginning of economic recovery,' the group said. The cost of risk for 2010 should also continue to fall at its current rate, Prot said, further helping the company turn strong profits.
BNP's acquisition of assets of Benelux bank Fortis, a deal which closed in May last year, also helped. BNP said it had made €254m in related cost savings as of March 31, which it said was in line with previous announcements.
BNP also said its American subsidiary BancWest had returned to profit during the first quarter.