'Unprecedented' volatility in financial markets
The world's financial markets remain "exceptionally volatile" due to the subprime credit crisis, according to French bank chief.
HONG KONG, April 9, 2008 - The world's financial markets remain "exceptionally volatile" due to the subprime credit crisis, the chief executive of France's largest bank said in Hong Kong on Tuesday.
"Since I last presented to the market at the end of February, the
environment remains very challenging and the market exceptionally volatile,"
Baudouin Prot from BNP Paribas told reporters here.
"Then, through most of March, we saw a worsening of the crisis, with
extreme and unprecedented volatility expanding to new asset classes.
"This has created a very adverse trading environment," he said.
Despite the uncertainty, Prot said BNP was aiming to repeat record revenues
from 2007 this year in its Corporate and Investment Banking division.
"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 the southern Chinese city.
Last year the bank earned an overall net profit of 7.8 billion euros (11.6
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 capitalisation, has a limited direct
exposure to derivatives tied to subprime lending, where high-risk homeowners
in the United States 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 unauthorised trades by one of
The chief executive added that the bank was looking to expand its
businesses in eastern Europe and the Mediterranean, and improve already solid
performance in India and Brazil.