Huge write-downs, big layoffs and petits bonuses? Pas ici

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The Yanks are definitely struggling and the rosbifs are suspected to be squealing, but les Français seem to be doing very well thank you.

At least this appears to be the case when it comes to BNP Paribas. The French bank may have sparked the credit crisis back in August, but its 3Q results reveal its sub-prime-related write-downs and risk provisions were a bijou €301m.

Could it be therefore that now's the time to escape the horrors of Canary Wharf and head for the comparative cosiness of BNP's London office in Harewood Avenue? Maybe so.

John Raymond, an analyst at research firm Creditsights, says BNP Paribas seems to have been "genuinely not very involved" in the areas worst impacted by the sub-prime crisis: "It's not obvious that they will need to make redundancies - it looks like a relatively safe place to be, compared with some."

This doesn't mean that all is cordon bleu cookery and haute couture over in north London. In the past few years BNP Paribas spent no little effort building its leveraged finance team, a move which it may now be coming to regret, given much of that €301m is thought to be related to leveraged loans turned sour.

Moreover, rumour has it that Michael Johnson, co-head of leveraged finance at the bank in the UK, has left /been asked to nip out and never come back. This is unconfirmed by BNP, but when we called the switchboard we were told there was no one of Johnson's name on the system.

Headhunters suggest the French champion has shelved any further aspirations to world domination in leveraged finance: "They were interviewing earlier in the year, but they didn't complete the process before the credit crisis occurred and the hiring process was scrapped," says Lee Thacker at search firm Silvermine Partners.

More encouragingly, BNP Paribas is expected to hire in commodities, equity derivatives and pensions liability management in 2008, as well as strengthening its presence in Asia.

Less encouragingly, this year's bonuses at the French bank may be more likely to finance a weekend in a gîte than a yacht moored off the Côte d'Azur: Raymond says a fall in 3Q operating expenses as a proportion of revenues was attributed to variable pay.

Thacker predicts there may be more pain to come: "Most European banks will report their worst results in the fourth quarter - that's when they will need to mark their losses to market."

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