BNP Paribas Ambitiously Pursues CET1 and Profit Goals

Post by : Bianca Suleiman

BNP Paribas has revealed its ambitious plan to elevate its Common Equity Tier 1 (CET1) ratio to 13% by the year 2027, emphasizing a commitment to enhancing capital strength and sustainable growth practices. The bank's strategy intertwines solid profitability, measured growth, and astute asset management to achieve this notable objective.

Achieving the CET1 target relies on three core elements: improved group profitability that facilitates capital creation, a modest annual rise in risk-weighted assets of around 2%, and a proactive approach to selling off non-core assets. This structured approach promises to support both growth and financial stability.

Focusing on Profitability

The bank has set a Return on Tangible Equity (ROTE) goal of 13% by 2028, an increase of 210 basis points over 2024 levels. Approximately two-thirds of this enhancement is expected from ongoing strategic initiatives across CPBF, Personal Finance, CPBB, and Asset Management, which collectively account for a third of BNP Paribas' risk-weighted assets. The rest of the uplift is anticipated from other strategic segments that are adopting a disciplined growth approach driven by efficiency.

Efficiency and Capital Strategy

In addition, BNP Paribas is prioritizing operational efficiency, setting a goal to lower its cost/income ratio to 61% by 2026 and to further refine it to 58% by 2028. This indicates the bank's focus on sustainable cost governance while still driving growth.

Any surplus capital beyond the 13% CET1 target will be evaluated annually for potential redistribution to shareholders. As part of this strategy, BNP Paribas will implement a €1.15 billion share buyback program slated for November 2025, with expectations based on the ECB-approved allocation of earnings from 2025.

The bank plans to present its growth and profitability roadmap through 2028 during its forthcoming 2025 results release, with a full plan for 2027-2030 expected early in 2027. These actions illustrate BNP Paribas's unwavering commitment to achieving robust financial results while upholding a disciplined and strategic approach to managing capital and risk.