SKN | BNP Paribas Raises Targets After Strong 2025 Performance

Takeaways:

• BNP Paribas exceeded several 2025 profitability and capital targets ahead of schedule, reinforcing execution credibility.

• Wealth, asset management, and insurance drove a material uplift in revenues, supported by acquisitions and inflows.

• Higher mid-term targets signal confidence, but efficiency delivery will be key to sustaining investor support.

Earnings Momentum Supports Strategic Reset

BNP Paribas reported a strong set of full-year and fourth-quarter results for 2025, prompting management to raise key medium-term financial targets. Fourth-quarter net income climbed 28% year-on-year to €2.97 billion, while full-year net income rose 4.6% to €12.2 billion.

Quarterly revenues increased 8%, underpinned by a 13.3% rise in gross operating income. Operating expenses also moved higher, up 5.2%, reflecting integration activity and continued investment across growth divisions.

Wealth and Investment Services Lead Growth

The standout performance came from the investment and protection services division, which includes private banking, wealth management, insurance, and asset management. Revenues in this unit surged nearly 40% year-on-year, driven by the integration of AXA Investment Managers and continued organic growth across the platform.

Wealth management assets under management benefited from favourable markets and robust inflows, with €21.7 billion of net new money recorded in 2025, including €1.5 billion in the fourth quarter alone. The quarter also marked the first contribution from HSBC Wealth Management Germany, adding incremental revenues and reinforcing BNP Paribas’s push to deepen its European wealth footprint.

Targets Lifted as Execution Gains Credibility

BNP Paribas surpassed multiple 2025 targets ahead of schedule. Return on tangible equity reached 11.6%, edging past the 11.5% goal, while net income slightly exceeded the €12.2 billion target. Capital strength also remained solid, with a Common Equity Tier 1 ratio of 12.6%, above management’s 12.3% objective.

Reflecting this progress, the bank raised its 2028 ambitions. Management now targets a return on tangible equity above 13% and a cost-to-income ratio below 56%, improving on prior goals of roughly 13% and 58%. The updated targets place greater emphasis on efficiency gains and disciplined cost control as growth normalises.

Market Response and Strategic Outlook

Investor sentiment has responded positively, with shares up around 11% year to date and trading near €90.93. Management highlighted the record quarterly performance and confirmed 2026 objectives, while also outlining a longer-term 2027–2030 plan centred on operational efficiency, capital optimisation, and value creation.

The raised targets reinforce BNP Paribas’s effort to close the valuation and profitability gap versus leading European peers. However, delivery on cost discipline and integration synergies will remain central to maintaining market confidence.

For a confidential discussion on how European bank profitability targets, wealth-driven growth strategies, and capital efficiency can be assessed within a global portfolio allocation framework, contact our senior advisory team.