The Banque de France said it returned to profit in full-year 2004, helped by exceptional gains from real estate disposals and its exit from private banking activities. The bank posted a net profit of â¬82 mln in 2004 after a loss of â¬179 mln a year earlier and governor Christian Noyer said he expects earnings to "continue to rise strongly" going forwards. The state's proceeds from the bank's results totalled â¬183 mln: â¬138 mln in business tax and â¬40 mln in dividends.
Noyer said gold sales totalled 40 tonnes in 2004, producing "negligible" proceeds in the fourth quarter, following September's accord with the government over the sale of bullion. He confirmed the bank will sell 500-600 tonnes from its remaining 2,984.7 tonnes over the coming five years, with timing directed by market conditions.
This is expected to generate an additional â¬200 mln per year for the state budget and Noyer said the bank will continue to generate "significant" revenues for the state through tax and dividends.
He said the bank will continue its policy of selling real estate, extending the sales to office as well as residential rental properties, but did not give precise details. Noyer refused to be drawn on questions on French GDP growth or on the interest rate policy of the ECB, of which he is a board member. "We are here to discuss the results of the Bank of France and the question of interest rates was covered at yesterday's conference," he said.
The ECB yesterday ruled out any idea of a cut in interest rates, with president Jean Claude Trichet saying "a decrease of rates is not an option for the governing council".
Noyer said at the end of March that the rate of economic growth in France is currently nearer to 2 pct than to the 2.5 pct the French government is hoping for, adding however that "we do not yet have a view for the whole year".
Source: Freeman News