BNP Paribas hikes cost cuts by 400 million euros after weak results
PARIS (Reuters) -BNP Paribas, the euro zone's largest bank, on Wednesday said it will step up its cost-cutting plan by 400 million euros ($437 million) after reporting weak results for the fourth quarter.
The bank intends to generate the additional savings this year, increasing its cumulated savings goal over the 2022-to-2025 period to 2.7 billion euros.
The additional cost cuts will notably stem from automation, lower purchases, a cheaper way of running premises and better so-called «mutualization» of tasks between outsourced employees, according to slides of a presentation to be made today by BNPP at a Morgan Stanley conference.
BNPP's announcement comes as banks are bracing for subdued deal flows, modest bonuses and heavy job cuts in 2024. The lender's smaller French rival, Societe Generale (OTC:SCGLY), said earlier this year that it will cut 900 jobs at its Paris head office.
BNP Paribas (OTC:BNPQY) also said the payout dividend ratio of 60% in 2024, 2025 and 2026 would represent about 20 billion euros payment for shareholders.
Last month, BNP Paribas reported a surprise drop in fourth-quarter income and pushed back a key profitability target, triggering a more than 9% fall in the French bank's shares.
Revenues at its investment bank, as well as at its consumer and commercial real estate businesses, fell from 2023 and its Chief Executive Jean-Laurent Bonnafe said the outlook was not good as he expected an economic slowdown in the euro zone.
Additionally, the bank confirmed on Wednesday its net profit would rise this year compared with 2023 and reiterated it will not hit its target for return on tangible equity (ROTE) — a measure of profitability — of 12% target until 2026.
($1 = 0.9152 euros)
($1 = 0.9155 euros)
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