BNP (EPA:BNP) Cuts Earnings by $983 Million for BNL Division

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BNP Paribas SA(EPA:BNP), the biggest bank in France, has stated that the company will set aside more money for the BNL division of the company. The BNL division is the company’s Italian corporate consumer banking unit.

The company wrote down $983 million from its fourth-quarter earnings for goodwill related to its BNL division.

The company made a statement on Wednesday, stating that the bank still intends to pay a 45% of profit dividends this year. The charge will also have a positive effect on the company’s regulatory capital, and will help fund BNL operations.

BNP’s minimum capital level was set by the European Central Bank, and is 10% for 2016. This is measured through common equity tier 1 utilizing a ratio. The current ratio stood at 10.7% at the end of September, and the company believes that this measure may rise by as much as 40 basis points following a potential sale of First Hawaiian Bank.

The bank’s stock has risen 8% this year and the company has a current market value of €66 billion.

News that the company will be reducing its earnings by $983 million has caused the company stock to fall by 0.76% at the end of close on Thursday. The ECB recommends that the bank bring their capital ratio to 11.5% by 2019. The bank hopes to reach this level by mid-2017.

Jacob Maslow is a native New Yorker with  five children. He left his payroll manager position after finding that his true passion was in writing, and has never looked back.

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