Sentiment Score: +8

Sentiment Change: +3

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BNP Paribas Earnings - Analysis & Highlights for Q4 2024

Overview

PositivesNegativesOutlook

IPS is expected to become a major driver of growth, with the acquisition of AXA IM. All activities in this department bar Real Estate performed extremely well this quarter, and revenues for the division were up 8.4% YoY.
Personal Finance is growing with volumes up 4% and the top line is expected to grow by 5%.
The company has decided to implement an interim dividend starting this year that will be the equivalent of 50% of the first half EPS and paid on the 30th of September.
CPBS had a good performance, up nearly 5%, supported by the Commercial & Personal Banking activities with higher deposits and stable loans.
The company is confident in the strength of the business and its ability to drive organic growth.

Q4 2024 Earnings Call

Cost of risk in CPBS is up YoY and QoQ due to one specific file.
Margins were squeezed to some extent in Turkey for banks, at least for that type of bank, because of the cost of fund and the rate scenario.
Specialized Businesses were stable YoY but still impacted by the ongoing normalization of used car prices.

Q4 2024 Earnings Call

The company expects IPS to experience a cumulative profit before tax growth of about one-third in the next two years.
The company expects to continue to gain market share, especially in the hands of key clients, key customers for which it can deliver value-added transactions.
The company anticipates a decrease in the rate.
The company expects to experience a significant outflow in current account deposits, down 25% over two years.

Q4 2024 Earnings Call

Q&A Highlights from BNP Paribas Earnings Call Q4 2024

Analyst asked about the company's plan beyond 2026 and how it will impact the return on equity.
- The company expects to deliver a 13% return on tangible equity by 2026, which includes 12% from the Commercial Bank in France, Personal Finance, AXA Investment Managers, and Wealth Management. The company also has plans to roll out a new platform in Europe, which will add significant value. The company aims to continue investing for the future and deliver additional profitability beyond the plan.
Analyst asked about the company's guidance for revenue growth in Specialized Businesses, which looks like it's around 2%.
- The company is still sticking to its guidance for Arval revenues being down 10% in 2025, despite the headwinds from used car sales. The company expects to grow revenues by 5% in 2025, due to organic growth and the volume of cars going up. The company also expects to grow deposits, which will trigger growth in 2025 and above in 2026, if the yield curve would steepen.
Analyst asked about the company's revenue growth in France and Belgium.
- Lars Machenil, Chief Financial Officer, confirmed that the company's revenue growth in France and Belgium is in line with its overall guidance of 3% or more for the eurozone.
Analyst asked about the gap between the company's consensus and the analysts' consensus.
- JeanLaurent Bonnafé, Chief Executive Officer, explained that the company's consensus is higher than the analysts' consensus due to several reasons, including external growth from acquisitions and the company's ability to grow efficiently with a growing profitability and return on tangible equity. He also mentioned that the consensus does not fully factor in the quality of the platform and the company's ability to grow efficiently. He stated that the company expects to deliver more than the consensus, with a return on tangible equity of 11.5% for 2025 and 12% for 2026.
Analyst asked about the company's payout ratio and how it would work in the context of potential bolt-on acquisitions.
- Lars Machenil explained that the company's current payout ratio of 60% return to shareholders and 40% for organic bolt-on growth has been working well. He stated that the company would consider how to structure a potential acquisition if it were relevant, but that reducing the payout ratio from 60% to 50% would not materially change the situation. He emphasized that the company feels there is a good balance between supporting growth and returning value to shareholders.

Q4 2024 Earnings Call