Greek debt write down of 50% is 'final offer': BNP Paribas

3rd November 2011, Comments 0 comments

The head of French banking group BNP Paribas Baudouin Prot warned on Thursday that the 50-percent debt relief offered to Greece was the bank's "final offer".

Prot said that if necessary, BNP Paribas was prepared to deal with the effects of a full Greek default.

The warning came as BNP Paribas, France's largest listed bank, announced a 72-percent slide in third-quarter earnings as a result of the Greek debt provision.

"This is the last time we will participate in a voluntary exercise in regards to Greece," Prot told BFM Business. "There is a time for everything. The time for voluntary action is over."

He said: "The offer that is on the table of the voluntary renunciation of half the Greek debt is the final offer that BNP Paribas will make."

Prot said: "We are not assuming there will be a full default, but we will face that if needed. It would be entirely manageable for BNP Paribas."

Greece stunned investors and its European partners this week by announcing a referendum on a deal reached last month to tackle its debt crisis.

The deal will see banks write down 50 percent of the debt owed by Greece, Athens introduce further austerity measures, banks boost their capitalisation and the European bailout fund strengthened.

Prot said the write down was "a very important sacrifice, very important assistance to Greece. And I believe Greece would very much regret rejecting this offer."

He also said BNP Paribas would raise its core capital ratio to nine percent of overall assets by June, as required under the European deal.

BNP Paribas on Thursday announced net income of 541 million euros ($746 million) in the third quarter, down 71.6 percent from the third quarter of 2010.

But it noted that by excluding the Greek debt provision, net income would have been 1.95 billion euros in the period, up 2.4 percent.

The bank said it had set aside a provision of 60 percent of the full amount of Greek sovereign debt it holds, equivalent to 2.09 billion euros.

© 2011 AFP

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