© Reuters. FILE PHOTO: A view of a BNP Paribas bank building in Paris, France, February 24, 2023. REUTERS/Sarah Meyssonnier/File Photo
By Mathieu Rosemain and Inti Landauro
PARIS (Reuters) -BNP Paribas, the euro zone’s largest bank, on Wednesday said it will step up its cost-cutting plans by 400 million euros ($437 million) after posting weak fourth-quarter results last month.
The new plan will boost its 2022-25 savings goal to 2.7 billion euros.
The additional cuts will stem from automation, lower purchases, and other areas, according to slides for a BNPP presentation scheduled today at a Morgan Stanley conference.
Shares in the French lender were up 3.3% by 0950 GMT, outpacing a 0.7% rise in a European bank benchmark index.
The bank also confirmed its net profit would rise this year and reiterated it would not hit its return on tangible equity (ROTE) profitability target of 12% until 2026.
BNP Paribas (OTC:) said its payout dividend ratio of 60% in 2024, 2025 and 2026 would represent about 20 billion euros for shareholders.
Barclays analysts said BNPP’s “higher conviction” on its ambitions for 2025 and 2026, driven by the outlook for this year, could lead to it upgrading forecasts down the line.
Banks are bracing for subdued deal flows, modest bonuses and heavy job cuts in 2024. BNPP’s smaller rival Societe Generale (OTC:) plans to cut 900 jobs at its Paris head office.
Last month, BNP Paribas reported a surprise drop in fourth-quarter income that triggered a more than 9% fall in its shares.
Revenue fell at its investment bank, as well as at its consumer and commercial real estate businesses and CEO Jean-Laurent Bonnafe said the outlook was not good due to an expected economic slowdown in the euro zone.
($1 = 0.9155 euros)
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