BNP Paribas is half-way through its latest business development plan, which runs from 2017 to 2020. In the bank’s own slightly clunky translation, its stated intention is to “build the European bank of reference”. So how is it getting on?
There are some quantifiable objectives: compound annual growth in revenues of at least 2.5% and in profits of above 6.5%, a return on equity in 2020 of 10%, a fully loaded common equity tier-1 (CET1) ratio of 12% in 2020 and a dividend payout ratio of 50%.
It has some cumulative cost savings targets too: €500 million in 2017, €1.1 billion in 2018, €1.8 billion in 2019 and €2.7 billion in 2020.
On most of those metrics, it is doing well – and it should, as a number of them are conservative both in the context of the bank’s own performance and the sector as a whole. After all, plenty of other banks in Euromoney’s group of 25 are already at or above the return on equity that BNPP, under CEO Jean-Laurent Bonnafé, is targeting for 2020. The bank itself is at 9.5%