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BNP Paribas 4th-quarter earnings hit by US$983 million writedown

[PARIS] BNP Paribas SA is writing down part of the goodwill related to its BNL unit, which will result in a reduction to fourth-quarter earnings of about 900 million euros (S$1.38 billion).

France's biggest bank is setting aside more capital for the Italian corporate and consumer-banking unit, the lender said in a statement on Wednesday. The charge will have a positive effect on regulatory capital and the bank reiterated it plans to pay 45 per cent of profit in dividends.

The European Central Bank set BNP Paribas's minimum capital level, measured by the common equity Tier 1 ratio, at 10 per cent for 2016, the lender said in the statement. The ratio stood at 10.7 per cent at the end of September. BNP Paribas said it may boost the measure by 40 basis points as it explores alternatives for First Hawaiian Bank, including a possible sale or initial public offering.

BNP Paribas, with consumer-banking businesses in France, Belgium and Italy, faces pressure on margins amid record-low interest rates. The firm is reorganizing its investment bank as higher capital demands cut into returns on some businesses.