Published by Global Banking and Finance Review
Posted on September 16, 2025
2 min readLast updated: January 21, 2026
BNP Paribas forecasts a retail banking recovery to enhance capital growth, aiming for a 13% ROTE by 2028, supported by cost control measures.
(Reuters) - French bank BNP Paribas extended its guidance to 2028 on Tuesday, signalling confidence in the longer-term outlook with a turnaround in commercial banking profitability and higher capital generation.
The euro zone's biggest bank by assets said it was setting a target of 13% for 2028 for return on tangible equity (ROTE), driven mainly by the turnaround of its commercial banking division's profitability.
It forecast its CET1 ratio would reach 12.5% by the end of 2027, supported by higher capital generation.
BNP’s reaffirmed 2025 targets and extended guidance to 2028 signal confidence in both near-term performance and long-term growth, with internal drivers seen as key to further ROTE expansion, RBC analysts said in a note to investors.
BNP expects a recovery in its commercial and personal banking division to lift ROTE to 12% in 2026 from 10.9% in 2024.
"Commercial banking revenues are already benefiting from the new rate environment," the group said in a statement, adding that it would continue to implement cost control measures across all its divisions.
BNP shares have risen about 35% this year, but that lagged a 48% gain in the STOXX Europe 600 Banks index as higher interest continued to boost profitability and bad loans remained low. BNP shares have seen less than half the gains the average European bank has enjoyed in the past three years, as investors questioned whether the lender could improve its profitability versus rivals.
Alongside its second-quarter results in July, BNP projected a strong recovery in its retail banking division for the second half of the year, driven by continued rigorous cost management and improved sales across its retail and consumer segments.
On Tuesday, BNP confirmed its 2025 net income target of 12.2 billion euros ($14.37 billion) and said that it would announce its full 2027-2030 financial outlook in early 2027.
($1 = 0.8490 euros)
(Reporting by Alban Kacher; Editing by Tom Hogue, Janane Venkatraman and Susan Fenton)
Return on tangible equity (ROTE) is a financial metric that measures a company's profitability by comparing net income to tangible equity, providing insights into how effectively a company generates profits from its equity.
Capital generation refers to the process of creating capital through various means, such as profits, investments, or financing, which can be used for growth, expansion, or other financial activities.
The Common Equity Tier 1 (CET1) ratio is a key measure of a bank's financial strength, calculated by dividing its core equity capital by its total risk-weighted assets, indicating the bank's ability to withstand financial stress.
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