Investing.com -- Shares of BNP Paribas (EPA:BNPP) rose over 2% on Tuesday following its Q4 results, which came in above analysts' forecasts.
The French banking giant reported a net profit of EUR 2.32 billion for the quarter, surpassing the EUR 2.24 billion consensus estimate.
This was driven by better-than-expected underlying operating profits, which were 6% ahead of consensus.
The bank's loan loss charges, which came in at EUR 878 million, were also lower than the EUR 909 million anticipated by analysts, further supporting the positive sentiment around the stock.
One of the key metrics driving investor optimism was the improvement in BNP Paribas’ Common Equity Tier 1 ratio, which stood at 12.9% for Q4, above the 12.7% consensus estimate.
Analysts at RBC Capital Markets noted that this solid capital position, coupled with organic capital generation of 30 basis points, was a positive signal for the bank’s financial stability and future growth.
This growth in capital, despite a slight 20 basis-point hit from capital distribution, reassured investors.
BNP's capital distribution plan for FY 2024 also caught attention. The bank intends to distribute a dividend of EUR 4.79 per share and buy back EUR 1.08 billion in shares, which is closely aligned with analysts' expectations.
The 60% payout ratio—split between 50% dividends and 10% share buybacks—reflects the bank's commitment to returning value to shareholders while maintaining a solid capital base.
Further driving sentiment was BNP's strong performance in Global Markets, with revenue growth that exceeded expectations by 16%, reflecting a 32% year-on-year increase in GM revenues, particularly in equity and fixed income trading.
This helped lift overall performance in Corporate and Institutional Banking, where pre-provision profit was 23% ahead of consensus.
RBC Capital Markets analysts flagged this as a standout segment, indicating the bank’s ability to capitalize on favorable market conditions.