By Scott Kanowsky
Investing.com -- BNP Paribas SA (EPA:BNPP) announced that it will launch a share buyback program worth €5 billion this year and upgraded its profit forecast after the French lender was boosted by higher interest rates in 2022.
The Paris-based group said it would return an additional €1B (€1 = $1.0721) to shareholders following a spike in its annual earnings. It previously said that the buybacks would include €4B derived from the sale of its U.S. unit Bank of the West, which was finalized last week.
That $16.3B deal, along with the positive impact from an uptick in borrowing costs last year, also led BNP to upwardly revise its outlook for return on tangible equity to 12% in 2025. It had previously anticipated an increase of 11%.
Average annual growth in net income between 2022 and 2025 is also now seen at above 9%, up from its previous guidance of 7%.
In the fourth quarter, revenue grew by 7.8% to €12.11B, roughly in line with expectations, driven in part by strong growth in net interest income and increased fees at its commercial and personal banking unit.
But net income attributable to equity holders dropped by 6.7% to €2.15B, due to a decrease in one-off exceptional items compared to the same period in 2021. This was slightly below analysts' estimates of €2.29B.
Analysts at Barclays noted that while the results for the three months to December 31 were mixed, the guidance revisions were overall positive for the stock.
Shares in BNP Paribas rose in early European trading on Tuesday.