BNP Paribas cites challenges, plans China push

By Michael Flaherty

HONG KONG (Reuters) - BNP Paribas (BNPP.PA: Quote, Profile, Research) will find it difficult to meet a promise to match last year's investment banking revenue, in part due to worsening market volatility, Chief Executive Baudouin Prot said on Tuesday.

Market volatility worsened in March and created a "very adverse trading environment," Prot told a news conference.

"In this context, we still stick to our target to try to repeat last year's record revenue," he said, referring to the bank's corporate investment banking unit.

"But I can only tell that it is becoming more and more challenging to try to repeat these revenues, and visibility is limited for the remainder of 2008."

Shares in BNP, off more than 2 percent in morning trade, were down 1.61 percent at 69.08 euros by 1016 GMT, in line with a 1.64 percent fall in the DJ Stoxx bank index .

"BNP Paribas has always presented this objective as very optimistic," said Landsbanki Kepler banking analyst Pierre Flabbee.

"We actually see these revenues falling 16 percent on the year. And, with the current environment, if they manage to limit the erosion to 16 percent that would be good."

BNP said in February after its fourth-quarter earnings that, in 2008, it wanted its corporate investment banking arm to match last year's record revenue. BNP gave a confident 2008 outlook after that quarter despite posting lower profits.