Shares of BNP Paribas surged after the French financial institution posted sturdy fourth-quarter outcomes, with web revenue up 15.7% to €2.32bn and a dividend hike. UBS fell sharply as earnings missed estimates, with CEO Sergio Ermotti warning of rising Swiss capital necessities.
BNP Paribas and UBS Group AG delivered sharply contrasting earnings outcomes final quarter, sending their shares in reverse instructions on Tuesday.
Whereas France’s BNP Paribas surged 2.3% by mid-morning buying and selling in Europe after posting a stronger-than-expected revenue and elevating shareholder payouts, Switzerland’s UBS slid as a lot as 5.4% because it missed earnings estimates and warned of rising capital necessities affecting the outlook.
BNP Paribas: Funding banking energy lifts revenue
BNP Paribas, the eurozone’s largest lender by property, posted a 15.7% rise in fourth-quarter web revenue to €2.32 billion, surpassing analysts’ expectations of €2.24 billion. Income jumped 10.8% to €12.1 billion, additionally beating forecasts.
Funding banking was the important thing progress driver, with Company & Institutional Banking revenues hovering 20.1% year-on-year. International Markets revenues surged 32.4%, powered by a 30% leap in fairness buying and selling and a 34.2% rise in fastened revenue, currencies, and commodities buying and selling.
International Banking and Advisory additionally delivered sturdy performances, up 10.8% and 35.7%, respectively, in Europe, the Center East, and Africa.
Different divisions confirmed blended outcomes. The Industrial, Private Banking & Providers phase noticed a 4.7% income improve, whereas Insurance coverage and Wealth Administration grew by 13.4% and 10.8%, respectively. Nonetheless, leasing and shopper finance suffered from a downturn in used-car costs, weighing on total retail banking profitability.
BNP Paribas barely revised its profitability goal, reducing its return on tangible fairness (ROTE) objective for 2025 to 11.5%, from a previous vary of 11.5%-12%. It stays assured of attaining 12% ROTE by 2026, supported by cost-cutting measures and the anticipated advantages of its €5.1 billion acquisition of AXA Funding Managers, anticipated to shut mid-year.
Jean-Laurent Bonnafé, BNP Paribas’ CEO, highlighted the financial institution’s momentum, saying: “The group achieved superb performances within the fourth quarter of 2024 and surpassed its 2024 targets whereas sustaining a stable monetary construction. Our diversified and built-in mannequin positions BNP Paribas properly for the subsequent section of the financial cycle.”
Bonnafé additionally highlighted BNP Paribas’ ambitions past 2026: “Past that, I anticipate a powerful acceleration, pushed by the implementation of exterior progress, with the AXA IM venture, in addition to developments in Wealth Administration and Life Insurance coverage. On the energy of its diversified and built-in mannequin, BNP Paribas is properly positioned for the subsequent section of the financial cycle.”
The financial institution rewarded shareholders with a dividend hike to €4.79 per share, a 4.1% improve from 2023. It additionally introduced a brand new share buyback programme price €1.08 billion within the second quarter of 2025. From this 12 months, BNP will implement a semi-annual interim dividend, with an preliminary payout in September overlaying 50% of first-half web earnings per share.
UBS: A revenue rebound overshadowed by lacking estimates
UBS reported fourth-quarter web revenue of $770 million (€745 million), swinging from a lack of $279 million (€270 million) a 12 months earlier. Regardless of this turnaround, the financial institution underwhelmed market expectations, with earnings per diluted share at $0.23 (€0.22), properly beneath analysts’ forecasts of $0.30 (€0.28).
Income for the quarter rose to $11.64 billion (€10.75 billion), up from $10.86 billion (€10.04 billion) a 12 months earlier however lacking consensus estimates of $11.17 billion (€10.32 billion).
UBS introduced a dividend of $0.90 per share and plans to repurchase $1 billion (€920 million) of shares within the first half of 2025, with a further $2 billion (€1.85 billion) buyback deliberate for the second half.
CEO Sergio Ermotti reassured buyers that UBS had made progress in integrating Credit score Suisse, which it acquired in mid-2023.
“Our sturdy full-year efficiency displays our unwavering dedication to serving our purchasers, the energy of our diversified world franchise, and the progress now we have made on the combination,” Ermotti mentioned. “We’re assured in our means to considerably full the combination by the top of 2026, obtain our monetary targets, and fulfil our progress initiatives as we place UBS for a profitable future.”
Nonetheless, the financial institution additionally faces mounting regulatory capital necessities, an element that would weigh on future returns.
“Following the failure of Credit score Suisse, Switzerland is contemplating important adjustments to its capital, decision and regulatory regime, which, if proposed and adopted, could considerably improve our capital necessities or impose different prices on UBS. These components create larger uncertainty about forward-looking statements,” the UBS’ quarterly report said.