BNP starts buyback, boosts capital goal after share drop

[PARIS] BNP Paribas announced a new buyback and plans to reach a target for capital strength early as chief executive officer Jean-Laurent Bonnafe seeks to reverse a recent slide in the stock price.

The French lender will start a 1.15 billion euros (S$1.7 billion) share buyback programme to return some of its profits this year after receiving regulatory approval, according to a statement on Thursday (Nov 20). It plans to lift the CET1 ratio, a key measure of capital strength, to 13 per cent by 2027, a year earlier than planned.

“We aim to further enhance our profitability profile, while remaining attentive to our shareholders through a disciplined and attractive distribution policy,” Bonnafe said in the statement.

Bonnafe is moving to shore up investor confidence after a series of setbacks weighed on the stock of the French lender, including a hit from bad debt in the third quarter and a recent court ruling in the US that raised concerns about a costly settlement. Shares of BNP Paribas have declined about a fifth from a high reached in August.

The buyback accelerates the return of 2025 earnings to shareholders, after French lawmakers last month adopted an amendment to the 2026 budget bill that would raise the tax rate on share buybacks to 33 per cent. It’s unclear what form the final budget will eventually take.

BNP also set a target for a cost-to-income ratio of 61 per cent next year and 58 per cent in 2028. The bank said it would publish its outlook through to 2028 along with its 2025 results. A medium-term plan covering 2027 to 2030 will be presented in early 2027. BLOOMBERG