Dresdner hit by credit crisis, but BNP sails through
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Dresdner took a total of €575 million in losses in the quarter to September 30. €350 million relates to its €7.9 billion exposure to asset-backed securities (ABS), with the rest stemming from the crisis's effects on its €5 billion leveraged loan commitments and other credit products. The bank has €2 billion exposure to subprime ABS. So far this year it has written down its ABS book by a total of €416 million. The bank's operating profit fell to €87 million from €391 million in the third quarter of 2006.
BNP Paribas, meanwhile, reported a €301 million penalty from the crisis, but saw its profits increase compared with 2006 - net income rose 21% to €2.03 billion. The bank saw cost of risk rise by €115 million, due to the increased risk associated with US home builders, and a net write-down of €194 million on its €3.7 billion leveraged loan portfolio. The bank said it had "negligible" direct exposure to US subprime risk.