36

BNP Paribas and UBS Group AG posted contrasting fourth-quarter earnings, sending their stock prices in opposite directions on Tuesday.

BNP Paribas shares jumped 2.3% after reporting better-than-expected profits and increased shareholder payouts. Meanwhile, UBS shares fell 5.4% after missing earnings estimates and warning about rising capital requirements.

BNP Paribas, the largest eurozone lender by assets, saw fourth-quarter net income rise by 15.7% to €2.32 billion, beating expectations of €2.24 billion.

Revenue grew 10.8% to €12.1 billion, driven by investment banking, where Corporate & Institutional Banking revenue soared 20.1% year-on-year.

Global Markets revenue jumped 32.4%, fueled by a 30% rise in equity trading and a 34.2% increase in fixed income, currencies, and commodities trading.

Other business segments delivered mixed results. Commercial, Personal Banking & Services revenue grew 4.7%, while Insurance and Wealth Management rose 13.4% and 10.8%, respectively. However, leasing and consumer finance struggled due to falling used-car prices, impacting retail banking profits.

BNP Paribas adjusted its profitability forecast, lowering its 2025 return on tangible equity (ROTE) target to 11.5%, down from 11.5%-12%. However, the bank remains confident of reaching 12% ROTE by 2026, supported by cost-cutting measures and its €5.1 billion AXA Investment Managers acquisition, set to close mid-year.

CEO Jean-Laurent Bonnafé emphasized the bank’s strong performance, stating: “BNP Paribas surpassed its 2024 objectives while maintaining a solid financial structure.”

BNP Paribas rewarded shareholders with a 4.1% dividend increase to €4.79 per share and announced a €1.08 billion share buyback program for the second quarter of 2025. From this year, the bank will introduce semi-annual dividend payouts, starting with a September distribution covering 50% of first-half earnings per share.

UBS reported a net profit of $770 million (€745 million) for the fourth quarter, reversing a $279 million (€270 million) loss a year earlier.

Despite the profit rebound, UBS fell short of market expectations, posting $0.23 (€0.22) earnings per share, missing the $0.30 (€0.28) forecast.

Quarterly revenue climbed to $11.64 billion (€10.75 billion), up from $10.86 billion (€10.04 billion) last year but below analyst estimates of $11.17 billion (€10.32 billion).

UBS announced a $0.90 per share dividend and plans to buy back $1 billion (€920 million) of shares in early 2025, with an additional $2 billion (€1.85 billion) repurchase in the second half.

CEO Sergio Ermotti reassured investors that UBS had made progress in integrating Credit Suisse, which it acquired in mid-2023.

“Our full-year results demonstrate UBS’ strong global franchise and the progress we’ve made in integration,” Ermotti stated. “We expect to complete the integration by 2026, meet our financial targets, and drive long-term growth.”

However, UBS warned of rising regulatory capital requirements, which could impact future profitability.

“The Swiss government is considering significant regulatory changes following Credit Suisse’s collapse, potentially increasing our capital requirements and costs,” UBS stated in its quarterly report.