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PREVIEW-French banks Q3 profit seen up, capital in focus

Published 10/28/2010, 10:46 AM
Updated 10/28/2010, 10:48 AM

* SocGen net seen nearly doubling to 793 million eur-Rtrs poll

* BNP net seen up 33.6 percent, to 1.74 bln eur-Rtrs poll

* French banks under pressure to disclose Basel impact

* Savings rate hike could start to impact retail revenue

By Lionel Laurent and Matthieu Protard

PARIS, Oct 28 (Reuters) - BNP Paribas and Societe Generale are seen posting higher quarterly profits next week even as concerns linger over French banks' exposure to tighter capital requirements and retail banking headwinds.

France's lenders are under pressure to shed more light on how new "Basel III" capital rules will affect their balance sheets as fears persist they may need to raise capital.

"The French banks are lagging a bit disclosure-wise, and Basel III is really very important," said WestLB analyst Christoph Bossmann.

Societe Generale, which reports results on Nov. 3, is seen posting a near-doubling in third-quarter net profit to 793 million euros ($1.1 billion), according to a Reuters poll of 14 analysts. Revenue is seen up 5 percent at 6.27 billion.

BNP, which reports results a day later, is seen reporting a 33.6 percent increase in net profit to 1.74 billion euros, according to a Reuters poll of 12 analysts. Revenue is seen slipping 1.5 percent to 10.51 billion, with investment banking seen hurt by weakness in fixed income.

Bank profitability is benefiting from a more benign risk environment than a year ago, though analysts are expecting signs of a pullback in French retail revenue because of an increase in the government's benchmark savings rate.

The interest rate on the "Livret A" government-backed savings book, which rose to 1.75 percent in August from 1.25 percent, affects a variety of products and its increase means banks pay out more to French savers.

"It is expected there will be a bit of a slowdown (in retail)," said Bossmann.

French retail banking brought a greater share of revenue and profit for SocGen last year than corporate and investment banking, a key money-spinner for the bank. ($1=.7205 Euro) (Editing by Jon Loades-Carter)

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