Profits at BNP Paribas drop in Q4 as COVID-19 provisions soar

PARIS, Feb 5 (Reuters) - France’s BNP Paribas on Friday reported a 13.9% drop in fourth-quarter net income as the lender set aside more charges for loans that may turn sour due to the COVID-19 pandemic rattling economies worldwide.

The eurozone’s biggest listed lender struck a more upbeat note for 2021, however, saying it expected its cost of risk, which reflects provisions for bad loans, to drop compared to 2020 as economic activity gradually rebounds in the second half.

BNP Paribas’ cost of risk rose by 65.5% to 1.59 billion euros in the October to December period versus a year earlier.

Net income fell to 1.59 billion euros - though this was higher than the average profit forecast by a poll of four analysts - while revenue fell by 4.5% to 10.83 billion euros, broadly in line with expectations.

The lender also expects costs to be flat this year while revenue should slightly increase. (Reporting by Matthieu Protard and Marc Angrand; Editing by Sarah White)