BNP announce €3 billion digital plan
(9 February 2017 – France) BNP Paribas plans to spend €3 billion (A$4.15 billion) from 2017-2020 to boost profitability, it stated, following reporting of its 2016 results.
The French bank said it would invest in digital technologies to improve efficiency and continue to adapt its branch network accordingly.
Its annual results benefited from cost cutting and the sale of a stake in Visa Europe, but profits in the final three months of last year missed market forecasts.
"The group is ready to accelerate," Chief Executive Jean-Laurent Bonnafe said.
The bank’s new targets are for a 6.5 percent annual increase in net income on average over 2017-2020, a 50 percent dividend payout versus 45 percent in 2016, and an improved return on equity (ROE) of 10 percent.
BNP executives also told a call with analysts the bank would reach its common equity tier one target - a measure of financial strength - of 12 percent long before 2020. Any excess capital would be a safety net amid growing uncertainties around the world, they said, adding a share buyback was not on the cards.
Last year, BNP's revenues increased by around 1 percent to €43.4 billion, while net income rose to €7.7 billion from €6.7 billion in 2015.
However, revenues and pretax income in its French retail banking operation fell, despite its assets growing in size.
"Revenues are up despite a lackluster environment," Bonnafe said, adding costs had been kept under control.
Fourth-quarter net income rose to €1.44 billion, more than doubling from €665 million a year ago.
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