BNP Paribas sets out plans to deliver an increased dividend payout and an improved return on equity by 2020, hoping that headwinds it faces, such as low interest rates and regulatory pressures, will ease by then. But, as Sonia Legg reports, large parts of the business struggled in 2016.
A big bank with big plans - only it's perhaps a little late coming up with them. That's the feeling after BNP Paribas' annual results. They showed large parts of the French lender's business struggled in 2016, particularly retail banking. (SOUNDBITE) (ENGLISH) MICHAEL HEWSON, MARKET ANALYST, CMC MARKETS, SAYING: "If you actually take the investment part of the bank out of the equation the underperforming bit is the retail bank and ultimately that is where the next lot of cost savings are likely to be made." Cost cuts last year and the sale of a stake in Visa Europe helped increase revenues by 1 percent to 43.4 billion euros. Net income rose by a billion to 7.7. billion. But profits in the final three months missed forecasts, sending its shares down almost 5 percent. Chief Executive Jean-Laurent Bonnafe said the group was "ready to accelerate" over the next three years and was investing in a digital transformation. (SOUNDBITE) (ENGLISH) MICHAEL HEWSON, MARKET ANALYST, CMC MARKETS, SAYING: "BNP Paribas has remained significantly behind the curve with respect to that than some of their peers and ultimately I think that is why their results have disappointed to some extent." Four years of near zero interest rates in the euro zone haven't helped. But even Bonnafe's vow to boost net income by 6.5 percent over the next three years and pay higher dividends couldn't lift shares. Over the year the French lender has outperformed the European banking sector as it grows market share while rivals retreat. But there's a year of political uncertainly ahead - including elections in France.