BNP Paribas: The 4th quarter better than expected, caution on the yield target for 2025 – 04/02/2025 at 13:29

BNP Paribas logo in Paris
BNP Paribas reported on Tuesday results in the fourth quarter expectations, thanks in particular to its financing and investment banking activities (BFI) but was more cautious on a key profit target for 2025.
BNP Paribas earned 1.29% around 11:42 GMT, while the CAC 40 advanced 0.21% at the same time.
The French bank recorded an increase of 15.7% over a year of its net profit share of the group in the fourth quarter, at 2.32 billion euros, while analysts were tabling on a result at 2.24 billion of euros in a consensus compiled by BNP Paribas.
The net banking product increased by 10.8% compared to the previous year, to 12.1 billion euros, greater than 11.6 billion euros expected by analysts.
The Bank said that it would propose a dividend of 4.79 euros per share for 2024, up 4.1% compared to 2023. It also indicated that it provided for a share buyout plan ‘a value of 1.08 billion euros.
“We believe that the results of the fourth quarter are positive,” said Barclays analysts in a note, adding that BNP had respected key elements, including equity yield.
“We expect a positive reaction to the results, also in the light of the stagnation of the action price compared to the sector last month,” Citi analysts wrote.
BNP Paribas disappointed investors in the last quarters and its action was among the least efficient of the main lenders last year, losing almost 7% while those of its European rivals climbed.
BNP Paribas quarterly results were carried by its financing and investment bank (CIB) which recorded a growth of 20.1% of its net banking product over the period at 4.49 billion euros and 61 , 1% of its result before tax at 1.54 billion euros.
The “Global Markets” profession leaps in particular by 32.4% over a year thanks to fixed income securities activities, currencies and raw materials (FICC), up 34.2%, and activities in “Equity & Prime Services “(+30%), consisting in facilitating the purchase, selling and lending of equity and providing other services to customers such as alternative funds.
The performance of BNP Paribas in FICC activities has been greater than the average income growth of 26% recorded by the large banking groups of Wall Street, according to Jefferies.
The BNP Paribas market share in the investment bank in Europe, the Middle East and Africa increased from 4.6% in 2023 to 4.9% in 2024 in terms of income, according to the data company Dealogic .
PERSPECTIVES PRUDENTES
BNP Paribas, however, revised in its low range a key profitability target for 2025 and announced additional savings of 600 million euros in 2026 in addition to the 600 million euros planned for 2025.
These additional cost reductions would bring the total savings accumulated since 2022 to 3.3 billion euros.
BNP Paribas also announced a new strategic plan for the commercial bank in France in 2025, which will be presented to investors on June 26, and the extension of the BNP Paribas Personal Finance plan by 2028 “with the ambition of bring the profitability of these activities to the level of the group “.
The bank is now targeting a rate of profitability on tangible equity (ROTE) of 11.5% for 2025, against a objective previously announced between 11.5 and 12%.
The group now plans to reach the threshold of 12% of Rote in 2026, and more subsequently, in particular thanks to the integration of the AXA IM asset management company, whose acquisition at 5.1 billion ‘euros should be finalized by the middle of the year.
Asked about other acquisition prospects, general manager Jean-Laurent Bonnafé reaffirmed that he intended to stay away from large cross-border transactions.
“It is very difficult to integrate two banks belonging to two different countries,” he said. “But national mergers make sense, and it is therefore obvious that the banks that are in a position to do so have every interest in doing so.”
BNP Paribas also clarified providing an average annual growth in its net profit of more than 7% over the period 2024-2026, against a previous forecast of around 8% in 2022-2025 that certain analysts considered it difficult to reach.
While having significantly improved its operating coefficient, which measures the efficiency of a bank by bringing its operating expenses to its income, the bank remains above average in Europe.
Its operating coefficient amounted to 65% at the end of December, against 71.4% a year earlier. This ratio is greater than the European average of 53% from June 2024 in Europe, as indicated by the European banking authority in a report published last year.
(Written by Mathieu Rosemain; French version Bertrand de Meyer, edited by Blandine Hénault and Kate Entringer)