BNP Paribas and UBS reported contrasting financial results, causing sharp market reactions.
BNP Paribas shares jumped 2.3% on strong fourth-quarter earnings, while UBS shares fell 5.4% after missing profit expectations and warning of rising capital requirements.
Both banks announced dividends and share buyback plans, but UBS struggled to meet analysts’ expectations, overshadowing its profit recovery.
BNP Paribas, the largest eurozone lender by assets, posted a 15.7% net income increase, reaching €2.32 billion, surpassing analysts’ projections.
Revenue grew 10.8% to €12.1 billion, boosted by investment banking, which saw 20.1% growth. Global Markets revenue surged 32.4%, driven by 30% growth in equity trading and 34.2% in fixed income, currencies, and commodities trading.
The bank adjusted its 2025 return on tangible equity (ROTE) target to 11.5%, slightly lower than the previous 11.5%-12% range. However, it remains committed to achieving 12% ROTE by 2026.
CEO Jean-Laurent Bonnafé emphasized BNP Paribas’ strong position: “We achieved excellent fourth-quarter results, surpassing 2024 targets while maintaining financial stability.”
The bank increased its dividend by 4.1% to €4.79 per share and introduced a new €1.08 billion share buyback for the second quarter of 2025. It also launched a semi-annual dividend policy, with a September interim payout covering 50% of first-half earnings.
UBS reported a net profit of $770 million (€745 million) for the fourth quarter, reversing a $279 million (€270 million) loss from the previous year.
Despite this turnaround, UBS missed expectations, with earnings per diluted share at $0.23 (€0.22), below analysts’ forecast of $0.30 (€0.28).
Quarterly revenue rose to $11.64 billion (€10.75 billion), improving from $10.86 billion (€10.04 billion) a year earlier but falling short of projections.
UBS announced a $0.90 per share dividend and a $1 billion (€920 million) share buyback for the first half of 2025, followed by a $2 billion (€1.85 billion) buyback in the second half.
CEO Sergio Ermotti reaffirmed the bank’s progress in integrating Credit Suisse, saying: “We are making solid strides in our merger and remain committed to meeting financial goals by 2026.”
However, UBS faces higher Swiss capital requirements, which could affect future returns.
The bank’s report highlighted regulatory uncertainty, stating: “Switzerland is considering major capital and regulatory changes that could significantly impact UBS.”
