By Helena Smolak
BNP Paribas cut its 2025 profitability target after fourth-quarter net profit fell on higher costs and missed expectations.
The French bank, the largest in the eurozone by market capitalization, said Thursday that it now expects net profit to grow about 8% annually on average between 2022 and 2025, down from its previous target of more than 9%.
The lender also cut its 2025 target for return on tangible equity–a key profitability metric for banks–to between 11.5% and 12% from around 12% previously. It said it is confident the old target will be achieved in 2026.
BNP Paribas attributed the change to mandatory reserves rules by the European Central Bank, a bank levy in Belgium and an issue of Belgian government bonds.
For the fourth quarter, the bank reported net profit of 1.07 billion euros ($1.16 billion), down from EUR2.14 billion in the same period in 2022. Revenue edged up 0.1% to EUR10.90 billion.
The results were below analysts’ expectations of net profit of EUR1.77 billion and revenue of EUR11.42 billion, according to consensus estimates provided by FactSet.
Operating costs rose, as did the group’s cost of risk due to provisions on portfolios of nonperforming loans, it said.
BNP said it plans to launch a share buyback worth EUR1.05 billion in 2024.
The company raised its dividend for 2023 by 18% to EUR4.60 a share.
Write to Helena Smolak at helena.smolak@wsj.com
