WRAPUP 3-BNP profits jump as German rivals show pain

* BNP Q3 net profit 1.3 bln euros, up 45 percent

* Commerzbank continues to expect loss 2009, 2010

* Postbank has worse-than-expected loss

* BNP shares up 2.3 percent, Commerzbank down 3.9 percent

FRANKFURT/PARIS, Nov 5 - France's BNP Paribas beat forecasts with a strong rise in quarterly profits, enhancing its status as one of the winners from the banking crisis just as Germany's Commerzbank slipped further into the red.

BNP Paribas profits were powered by investment banking and acquisitions, while loan defaults from a souring economy meant Commerzbank, with its focus on retail banking and loans to midsized firms, faced losses this year and the next.

The lack of sizeable investment banking operations has left Commerzbank and rival German lender Deutsche Postbank without a profit engine that has recently boosted the earnings of Goldman Sachs and Credit Suisse Group AG.

BNP, the eurozone's second-largest bank by market value after Spain's Santander SA, was spurred by assets it acquired from Fortis SA/NV and by grabbing market share in investment banking and wealth management, taking advantage of problems at rivals such as UBS AG.

"BNP Paribas is becoming a cash machine generating over 5 billion euros in annual retained earnings," said Kian Abouhossein, analyst at JPMorgan.

Its net profit rose 45 percent from a year ago to 1.3 billion euros ($1.9 billion).

By 1227 GMT BNP shares were up 2.3 percent at 53.8 euros, bucking a weak start by European banks. The DJ Stoxx European bank index was down 0.8 percent, but is still up about 48 percent year to date and over 150 percent since March.

Shares in Commerzbank were down 3.94 percent.

BNP is among a handful of banks, led by the likes of Goldman Sachs, JP Morgan, Barclays Plc and Deutsche Bank, taking advantage of the disruption across the banking landscape in the past two years.

The crisis has led many rivals to retreat and others such as ING Group NV, Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc to take billions of euros in state help and face break-ups.

ECONOMIC FALLOUT HITS BANKS

Banks with exposure mainly to retail banking and lending to midsized firms are feeling the pain from growing bad debts amid rising unemployment in fragile economies.

Commerzbank, Germany's second-largest bank, which received an 18.2 billion euros bailout, on Thursday said it still expects to make a loss in 2009 and 2010.

Third-quarter loan loss provisions rose by 67 percent year-on-year to 1.05 billion euros thanks to impairments on loans to foreign banks and the souring economies in central and eastern europe, Commerzbank said.

For 2009 loan loss provisions will be higher than initially expected, Chief Financial Officer Eric Strutz said, adding that provisions will likely come down in 2010.

Another German lender heavily dependent on the performance of the underlying economy, Deutsche Postbank AG, also was weighed down by writedowns and provisions.

BNP Paribas Chief Executive Baudouin Prot declined comment on whether his bank might look at retail banking assets in Britain as Lloyds and RBS look to shed branches as part of EU conditions for receiving state aid.

Investment banking activity has remained strong after a rebound in the first half of the year. Although many investment banks have not received direct state aid, they have often benefited from a raft of regulatory changes brought about to rescue the financial system.

These rules have allowed them to delay booking losses on toxic assets, given them easier access to central bank funding, and eased the rules on collateral.

A ban on short sellers driving down their stock, and the resuce of counterparties such as American International Group has provided a further boost to both profits and bonuses.

(Writing by Edward Taylor, Marcel Michelson and Steve Slater; Editing by David Cowell)