BNP Paribas (BNP) Investor Update summary

Strategic plan overview

• New strategic plan targets over 17% pre-tax return on notional equity (RONE) by 2028, with more than 5% CAGR revenue growth, disciplined cost control, and a focus on technology, digitalization, and high-value segments.

• The plan emphasizes strengthening leadership in Corporate and Private Banking, transforming Retail Banking, and accelerating digital investments, with CPBF as a key entry point for high-value segments.

• Digitalization and tech investments are central, with 85% of individual clients as frequent mobile app users and significant investments in AI and human expertise.

• Market trends highlight increased competition from online banks and shifting client expectations toward digital and expertise.

• CPBF aims to contribute 13.5% of group revenues and 24% of cross-sell in 2024.

Financial trajectory and drivers

• Revenue growth is expected to be non-linear, with NII overtaking fees as the main growth driver from 2026, supported by stable deposit mix and favorable rate environment.

• Cost-to-income ratio is targeted to improve from 70.5% in 2024 to around 60% by 2028, enabled by cost savings from branch optimization, mutualization, and digitalization, with a net annual FTE reduction of 2.2%-2.5% mainly through natural turnover and mobility.

• Cost discipline aims to deliver +3-4 pts average jaws, with inflation offset by net cost savings and efficiency gains.

• Cost of risk is projected to remain below 25 basis points, supported by a high-quality, investment-grade client base.

• RWA growth is managed at around 2% CAGR through capital allocation to high-ROE segments, securitization, and operational risk adjustments.

Business segment strategies

• Corporate Banking will maintain leadership in large and mid-cap segments, accelerate SME growth, and leverage sector expertise and private equity for high returns.

• Private Banking targets over 5% AUM CAGR by 2030, with growth from client acquisition, digital private banking, and synergies with CIB and Wealth Management, including the AXA IM acquisition.

• Retail Banking transformation focuses on digital client acquisition, value-added services for affluent clients, and a new coverage model, with Hello bank! aiming to double clients to over two million by 2030 and reach positive gross operating income by 2025.

• Marketing Tech investments in data-driven, personalized, and real-time client engagement aim to boost efficiency and satisfaction.

• Business lines adapt to market trends and competition from online banks by enhancing digital platforms and expertise.