BNP Paribas Doubles Down On Cost Cuts: €400M Boost To Fuel Shareholder Returns

Zinger Key Points
  • BNP Paribas plans to increase its cost-cutting efforts by €400 million, targeting €2.7 billion in savings from 2022 to 2025.
  • The bank aims for higher net income in 2024, reaffirming Return on Tangible Equity (ROTE) targets and a 60% payout ratio.

Eurozones’ leading bank, BNP Paribas BNPQY, disclosed that it plans to boost its cost-cutting plan by €400 million ($437 million).

The bank raised its cumulated savings target to €2.7 billion for the 2022-to-2025 period.

The additional cost cuts will primarily derived from automation, lower purchases, a cheaper way of running premises, and better so-called “mutualization” of tasks between outsourced employees, as per Reuters.

BNP Paribas reiterated a steady growth trajectory in net income, with 2024 net income expected to be higher than 2023 Distributable Net Income.

The bank also reaffirmed ROTE of 11.5% to 12% in 2025 and 12% in 2026. This, combined with a 60% payout ratio, is anticipated to return about €20 billion to its shareholders from 2024-2026.

Also ReadBNP Paribas Faces the Music – Reportedly Settles Case Over Swiss Franc Loan

This month, the bank launched a share buyback program of up to €1.055 billion for 2024.

In January 2024, BNP Paribas reported fourth-quarter FY24 revenues of €10.898 billion (vs. €10.885 billion a year ago) and net income decline of 50.1% Y/Y to €1.069 billion.

Price Action: BNPQY shares traded higher by 3.03% at $33.62 on Wednesday.

Photo via Wikimedia Commons

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