Shares of BNP Paribas surged after the French bank posted strong fourth-quarter results, with net income up 15.7% to €2.32bn and a dividend hike. UBS fell sharply as earnings missed estimates, with CEO Sergio Ermotti warning of rising Swiss capital requirements.
BNP Paribas and UBS Group AG delivered sharply contrasting earnings results last quarter, sending their shares in opposite directions on Tuesday.
While France’s BNP Paribas surged 2.3% by mid-morning trading in Europe after posting a stronger-than-expected profit and raising shareholder payouts, Switzerland’s UBS slid as much as 5.4% as it missed earnings estimates and warned of rising capital requirements affecting the outlook.
BNP Paribas: Investment banking strength lifts profit
BNP Paribas, the eurozone’s largest lender by assets, posted a 15.7% rise in fourth-quarter net income to €2.32 billion, surpassing analysts’ expectations of €2.24 billion. Revenue jumped 10.8% to €12.1 billion, also beating forecasts.
Investment banking was the key growth driver, with Corporate & Institutional Banking revenues soaring 20.1% year-on-year. Global Markets revenues surged 32.4%, powered by a 30% jump in equity trading and a 34.2% rise in fixed income, currencies, and commodities trading.
Global Banking and Advisory also delivered strong performances, up 10.8% and 35.7%, respectively, in Europe, the Middle East, and Africa.
Other divisions showed mixed results. The Commercial, Personal Banking & Services segment saw a 4.7% revenue increase, while Insurance and Wealth Management grew by 13.4% and 10.8%, respectively. However, leasing and consumer finance suffered from a downturn in used-car prices, weighing on overall retail banking profitability.
BNP Paribas slightly revised its profitability target, lowering its return on tangible equity (ROTE) goal for 2025 to 11.5%, from a prior range of 11.5%-12%. It remains confident of achieving 12% ROTE by 2026, supported by cost-cutting measures and the anticipated benefits of its €5.1 billion acquisition of AXA Investment Managers, expected to close mid-year.
Jean-Laurent Bonnafé, BNP Paribas’ CEO, highlighted the bank’s momentum, saying: “The group achieved very good performances in the fourth quarter of 2024 and surpassed its 2024 objectives while maintaining a solid financial structure. Our diversified and integrated model positions BNP Paribas well for the next phase of the economic cycle.”
Bonnafé also highlighted BNP Paribas’ ambitions beyond 2026: “Beyond that, I expect a strong acceleration, driven by the implementation of external growth, with the AXA IM project, as well as developments in Wealth Management and Life Insurance. On the strength of its diversified and integrated model, BNP Paribas is well positioned for the next phase of the economic cycle.”
The bank rewarded shareholders with a dividend hike to €4.79 per share, a 4.1% increase from 2023. It also announced a new share buyback programme worth €1.08 billion in the second quarter of 2025. From this year, BNP will implement a semi-annual interim dividend, with an initial payout in September covering 50% of first-half net earnings per share.
UBS: A profit rebound overshadowed by missing estimates
UBS reported fourth-quarter net profit of $770 million (€745 million), swinging from a loss of $279 million (€270 million) a year earlier. Despite this turnaround, the bank underwhelmed market expectations, with earnings per diluted share at $0.23 (€0.22), well below analysts’ forecasts of $0.30 (€0.28).
Revenue for the quarter rose to $11.64 billion (€10.75 billion), up from $10.86 billion (€10.04 billion) a year earlier but missing consensus estimates of $11.17 billion (€10.32 billion).
UBS announced a dividend of $0.90 per share and plans to repurchase $1 billion (€920 million) of shares in the first half of 2025, with an additional $2 billion (€1.85 billion) buyback planned for the second half.
CEO Sergio Ermotti reassured investors that UBS had made progress in integrating Credit Suisse, which it acquired in mid-2023.
“Our strong full-year performance reflects our unwavering commitment to serving our clients, the strength of our diversified global franchise, and the progress we have made on the integration,” Ermotti said. “We are confident in our ability to substantially complete the integration by the end of 2026, achieve our financial targets, and fulfil our growth initiatives as we position UBS for a successful future.”
However, the bank also faces mounting regulatory capital requirements, a factor that could weigh on future returns.
“Following the failure of Credit Suisse, Switzerland is considering significant changes to its capital, resolution and regulatory regime, which, if proposed and adopted, may significantly increase our capital requirements or impose other costs on UBS. These factors create greater uncertainty about forward-looking statements,” the UBS’ quarterly report stated.