BNP Paribas (BNPP.PA) has announced an increase to its core capital buffer, known as CET1, setting a new target of 13% by 2027. This is up from the 12.5% target announced just two months ago. The move aims to reassure investors and bring the bank in line with its European counterparts. BNP Paribas is a leading global bank offering a wide range of financial services. As the Euro zone’s biggest lender by assets, it provides services including retail banking, investment banking, and asset management.
The updated forecast reflects stronger group profitability, moderate annual growth of approximately 2% in risk-weighted assets, and accelerated disposals of non-strategic businesses, according to the bank’s statement. Shares in BNP Paribas experienced a surge of about 5% following the announcement. Jefferies analysts described the new target as “a significant turning point for investor perceptions” and “a statement of strength”. Citi analysts said the move aimed to “draw a line under the capital debate”.
Analysts noted that this shift aligns BNP Paribas more closely with its peers. Deutsche Bank is aiming for a core capital ratio of 13.5% to 14% through 2028, while Societe Generale is targeting approximately 13% by 2026. BNP Paribas stated that it will decide at the end of each year how much of the capital exceeding the new target will be returned to shareholders. The group has also received approval from the European Central Bank to proceed with a 1.15 billion euro share buyback program, scheduled to launch before the end of November.
In addition to the capital buffer increase and share buyback program, BNP Paribas confirmed its target for a return on tangible equity of 13% by 2028. RBC analysts noted that BNP is addressing market concerns by raising its CET1 target to peer level, updating its distribution plan, redefining its cost targets to a cost income ratio, and moving earlier with its FY2025 share buyback to send a message of confidence on capital.
