BNP Paribas Lifts Returns Target Despite Sudan Legal Appeal

BNP Paribas has raised its shareholder returns target, anticipating improved revenue and profit alongside further cost reductions, as the French bank prepares for a US legal appeal concerning its alleged role in atrocities committed in Sudan. The bank reported stronger-than-anticipated fourth-quarter earnings, driven by a rebound in its French operations, reduced loan losses, and robust trading revenues in its investment division.

Net income increased by 28 percent year-over-year to €3 billion, exceeding analyst expectations of €2.8 billion. Despite underperforming some European peers in recent share price gains, BNP Paribas signaled a more optimistic outlook for shareholder returns.

The bank announced plans to return “at least” 60 percent of net profits to shareholders through dividends and share buybacks, starting in 2027 – an improvement over the 60 percent ratio planned for the current year. BNP Paribas also stated it would distribute excess capital to shareholders once its core tier one (CET1) ratio reaches 13 percent, currently standing at 12.6 percent as of the end of December 2025.

Under the leadership of Jean-Laurent Bonnafé over the past 15 years, BNP Paribas has cultivated a reputation for stability, successfully navigating crises like the COVID-19 pandemic, during which it expanded its balance sheet across Europe. The bank has also demonstrated the capacity for acquisitions, most recently acquiring AXA Investment Managers for €5.1 billion and expanding its car leasing operations.

However, BNP Paribas faced a setback in October 2025 when a New York court ruled it liable for $20.5 million in damages to three Sudanese plaintiffs, related to its financing of the former Khartoum regime. The bank is appealing the decision this month and expressed confidence in overturning the ruling. The verdict initially impacted its share price, though it has since largely recovered.

The legal challenge raises concerns about potential future payouts or settlements. BNP Paribas reiterated its confidence in its legal arguments, stating it is prepared to focus on defending its position.

BNP Paribas also revised upward its other financial targets after achieving its 2025 objectives for capital and return on tangible equity (ROTE). The bank now anticipates ROTE to surpass its previous goal of 13 percent for 2028. It also projects an average annual net profit growth of 10 percent, compared to the previously forecast 7 percent.

The bank is also focused on further cost optimization, outlining an additional €600 million in cost-cutting measures for 2026, building on the €2.9 billion already planned for the period 2022–2026. These measures include potential headcount reductions in areas such as investment management following the AXA acquisition.

The third quarter of 2025 saw BNP Paribas report net profit growth of 6.1 percent year-over-year, and the bank reaffirmed its full-year net profit target of over €12.2 billion. Revenues increased by 5.3 percent, and the CET1 ratio remained strong at 12.5 percent, absorbing the impact of the AXA IM acquisition. Management reiterated its 2026 ROTE target of 12% and outlined a path to 13% by 2028, driven by operational efficiency and strategic initiatives.

Sandro Pierri, CEO of BNP Paribas Asset Management and AXA Investment Managers, is set to present the strategic integration of AXA Investment Managers within the group. Thanks to AXA IM, IPS is expected to contribute approximately 20% to Group earnings in the mid-term.