BNP Paribas Doubles Down On Cost Cuts: €400M Boost To Fuel Shareholder Returns
Portfolio Pulse from Lekha Gupta
BNP Paribas (OTC:BNPQY) plans to increase its cost-cutting target by €400 million, aiming for a total of €2.7 billion in savings from 2022 to 2025. The savings will come from automation, lower purchases, and more efficient operations. The bank expects higher net income in 2024 than in 2023 and aims for a ROTE of 11.5% to 12% in 2025 and 12% in 2026, with a 60% payout ratio, planning to return €20 billion to shareholders from 2024-2026. Additionally, BNP Paribas has launched a share buyback program of up to €1.055 billion for 2024. Despite a 50.1% Y/Y decline in Q4 FY24 net income, BNPQY shares rose 3.03% to $33.62.
March 13, 2024 | 2:39 pm
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BNP Paribas plans to enhance its cost-cutting measures, aiming for €2.7 billion in savings by 2025, expects higher net income in 2024, and has launched a €1.055 billion share buyback program for 2024.
The announcement of increased cost-cutting measures and the expectation of higher net income in 2024 are positive signals for investors, indicating a strong financial strategy and potential for increased shareholder value. The launch of a significant share buyback program further supports the positive outlook, as it typically indicates the company's belief in its undervalued shares and a commitment to returning value to shareholders. These factors, combined with the immediate positive reaction in share price, suggest a likely short-term positive impact on BNPQY's stock.
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