BNP Paribas aims to return €5 billion to shareholders by bumping up stock purchases this year and has lifted its profit forecasts as higher interest rates boost its business, Report informs via The Financial Times.
France’s biggest listed lender, which reported record annual profits for 2022 on Tuesday, is also benefiting from the recently finalized $16.3 billion sale of its US retail unit Bank of the West. It said the disposal would help fuel greater-than-expected net income over the next two years as it starts reinvesting the cash, including through small acquisitions.
The bank had already flagged that it would buy back €4 billion worth of its shares as it funnels back some of the gains from the US sale to investors. It said on Tuesday that it planned an additional €1 billion in stock purchases in 2023 on the back of its earnings, hitting its goal for dividend payouts of 60 percent of profits, including a cash component.
BNP added that it now expected net income to grow by more than 9 percent annually to 2025, from a previous 7 percent forecast, and after its profits rose 7.5 percent in 2022 to €10.2 billion.
Its return on tangible equity, a measure of profitability, would be more than 12 percent by the end of the two years, BNP said, up from a previous 11 percent goal.
Like many of its European rivals, BNP is benefiting as the European Central Bank raises interest rates to tackle rising inflation, lifting earnings from loans in many of its markets. The eurozone also appears on course to have avoided a recession at the end of 2022, and economic prospects are brighter than they were months ago despite an energy crisis and Russia’s war on Ukraine.