Published by Global Banking & Finance Review®
Posted on February 5, 2026
3 min readLast updated: February 5, 2026
Add as preferred source on GoogleBNP Paribas plans more cost cuts after exceeding Q4 profit forecasts, aiming for a 13% ROTE by 2028. Retail banking growth supports profitability.
By Mathieu Rosemain
PARIS, Feb 5 (Reuters) - BNP Paribas pledged further cost cuts after reporting a better-than-expected fourth-quarter profit and nudging up a key profitability target, boosting its shares despite a disappointing performance at its investment bank.
The CEO of France's biggest bank said artificial intelligence would help deliver the savings by streamlining procedures and cutting running costs across support functions, while stressing the technology would be deployed selectively.
"We’re investing where it actually makes sense, because it’s really expensive," Jean-Laurent Bonnafe told reporters, describing AI as a "diamond-tipped tool" that would be used to reduce costs and simplify processes rather than rolled out indiscriminately.
BNP reported record net income of 2.97 billion euros ($3.51 billion) for the three months to December, up 28% year-on-year and above a company-compiled average analyst estimate of 2.84 billion euros.
Several analysts welcomed the results, with Royal Bank of Canada citing "good revenue momentum".
BNP's shares were up almost 5% at 1123 GMT. The stock has risen roughly 40% since early November but has lagged peers over the longer term, gaining about 110% over five years — less than half the rise in the broader European banking sector.
BNP is now targeting a return on tangible equity of more than 13% by 2028, versus 13% previously, and aims to lower its cost-to-income ratio to below 56%, compared with around 58% before.
Bonnafe said there was still room to step up cost savings, with the bank pointing to "additional measures" of around 600 million euros planned for 2026.
That would lift total recurring cost savings for 2022–2026 to 3.5 billion euros, above the 2.9 billion initially projected. BNP expects average annual net income growth of more than 10% over 2025–2028.
SUDAN APPEAL
The investment banking division posted a record quarter, with revenues up 1% year-on-year to 4.58 billion euros.
However, revenue from trading in fixed income, currencies and commodities rose just 0.8%, lagging Deutsche Bank and Wall Street rivals. By contrast, net interest margin in retail banking rose 6.3% in France and 17% in Belgium.
The new targets offer an early glimpse of BNP's next three-year strategic plan, due to be presented in early 2027. The bank said it would include a "comprehensive review of processes," with AI expected to deliver around half of the next incremental efficiency gains.
BNP said it would file an appeal by February 9 against a New York jury's October ruling that it helped Sudan's former government commit genocide by providing banking services in breach of U.S. sanctions.
The bank has no intention of paying "abnormal sums" to settle the long-running Sudan-related case, Bonnafe said.
The bank announced a cash dividend of 5.16 euros per share for 2025, with a final payment of 2.57 euros due in May.
(Reporting by Mathieu Rosemain. Editing by Ingrid Melander, Jan Harvey and Mark Potter)
The cost-to-income ratio measures a bank's operating expenses as a percentage of its income. A lower ratio indicates greater efficiency and profitability.
Net income is the total profit of a company after all expenses, taxes, and costs have been deducted from total revenue. It is a key measure of a company's profitability.
Retail banking refers to the banking services provided to individual consumers rather than businesses. It includes services like savings accounts, mortgages, and personal loans.
Investment banking involves financial services that assist companies in raising capital, providing advisory services for mergers and acquisitions, and facilitating the issuance of securities.
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