BNP Paribas has introduced an ambitious plan to elevate its Common Equity Tier 1 (CET1) ratio to 13% by the year 2027, emphasizing a commitment to enhance capital and foster sustainable growth. The bank’s strategy integrates strong profitability, cautious expansion, and systematic asset management to realize this objective.
The target for CET1 is underpinned by three key elements: increased profitability across the group generating capital, a regulated rise in risk-weighted assets of approximately 2% annually, and a swift process in shedding non-core assets. This integrated approach maintains a balance between growth ambitions and financial stability.
Focusing on Profitability
Confirmed is a Return on Tangible Equity (ROTE) target of 13% by 2028, indicating a notable 210 basis point enhancement from 2024. Approximately two-thirds of this progress will originate from ongoing strategic initiatives within CPBF, Personal Finance, CPBB, and Asset Management, which together account for a third of BNP Paribas’ risk-weighted assets. The balance of improvements is anticipated to stem from other strategic sectors pursuing growth through disciplined efficiency.
Emphasizing Cost Efficiency and Capital Strategy
Furthermore, BNP Paribas is prioritizing operational efficiency, targeting a reduction in its cost/income ratio to 61% by 2026, and subsequently to 58% by 2028. This approach underscores the bank’s pledge to sustainable cost oversight while advancing growth.
Any capital surplus exceeding the 13% CET1 target will undergo annual evaluation and be redistributed among shareholders. As part of this scheme, BNP Paribas intends to initiate a €1.15 billion share buyback program in November 2025, coinciding with the anticipation of 2025 earnings allocation, subject to ECB approval.
The bank is set to outline its expansion and profit trajectory through 2028 in its forthcoming 2025 results, accompanied by a comprehensive plan for 2027-2030 to be unveiled in early 2027. These initiatives fortify BNP Paribas’ commitment to achieving robust financial results, while adhering to a diligent and strategic fiscal and risk management approach.
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