BNP Paribas Raises Mid-term Performance Targets
BNP Paribas in France has raised its mid-term performance targets, aiming to drive business growth through 2028 by relying on implemented cost reduction and profit-boosting measures. As of press time, BNP Paribas shares were down 1.08%.
The largest bank in the eurozone by asset size made a slight upward revision to its target for return on tangible equity—a core profitability metric—on Thursday, planning to increase this ratio to above 13% by 2028, compared to the previous target of around 13%. The bank's actual return on tangible equity for 2025 is 11.6%, and its guidance for 2026 is 12%, so this adjustment represents an increase over both figures.
The Paris-headquartered bank also optimized its cost efficiency guidance, lowering its cost-to-income ratio target to below 56%, compared to the previous target of about 58%. For comparison, the bank's cost-to-income ratio for 2025 is 61.2%.
BNP Paribas also stated that it expects the group’s net profit attributable to shareholders to grow at an average annual rate of over 10% from 2025 to 2028, accelerating from the 7% growth target for the 2024-2026 period. The bank said this growth will support increased shareholder returns before 2028.
In terms of capital strength, BNP Paribas has set a target for its Common Equity Tier 1 ratio at 13% for both 2027 and 2028, compared to 12.6% for 2025. The bank also confirmed that starting in 2027, it will allocate any capital surplus exceeding this threshold.
These adjusted performance outlooks were released alongside a better-than-expected fourth-quarter earnings report. The bank’s CEO said the upward revision of guidance and confirmation of the 2026 target benefited from a structurally favorable interest rate environment as well as the bank’s strong performance in 2025.
In the fourth quarter of 2025 (October to December), BNP Paribas’ net profit rose 28% year-on-year to €2.97 billion, while revenue increased 8% year-on-year to €13.11 billion. Some drivers of this performance included the smooth integration of AXA Investment Managers into the bank’s insurance and protection services division, continued recovery in retail operations, and solid performance in investment banking. The bank also disclosed that fourth-quarter costs rose 5.2% year-on-year to €8.275 billion.
This quarterly performance exceeded the consensus market expectations compiled by the bank, which had projected net profit at €2.835 billion, revenue at €12.86 billion, and total expenses and depreciation at €8.2 billion.
BNP Paribas has proposed a full-year dividend of €5.16 per share for 2025, up 7.7% year-on-year. In November of last year, the bank also launched a €1.15 billion share buyback program based on its 2025 performance.
Editor: He Yun
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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