BNP Paribas and UBS Group AG posted contrasting earnings results, sending their stocks in opposite directions during Tuesday’s trading session.
BNP Paribas jumped 2.3%, fueled by strong profits and a dividend increase, while UBS plunged 5.4% after missing analyst expectations and warning of rising capital requirements.
Investors rewarded BNP Paribas’ earnings beat, while UBS struggled with market disappointment despite swinging back to profitability.
BNP Paribas, the largest eurozone lender, reported a 15.7% increase in fourth-quarter net income, reaching €2.32 billion, surpassing forecasts of €2.24 billion.
Total revenue rose 10.8% to €12.1 billion, driven by Corporate & Institutional Banking, which posted a 20.1% year-on-year revenue increase.
Global Markets revenues soared 32.4%, with equity trading up 30% and fixed income, currencies, and commodities trading rising 34.2%.
Other divisions posted mixed results. Commercial and Personal Banking grew 4.7%, while Insurance and Wealth Management expanded by 13.4% and 10.8%, respectively.
However, leasing and consumer finance suffered due to falling used-car prices, dampening retail banking profitability.
BNP Paribas adjusted its return on tangible equity (ROTE) target, lowering its 2025 goal to 11.5%, but remains confident in reaching 12% by 2026.
CEO Jean-Laurent Bonnafé highlighted the bank’s strong performance, stating: “We exceeded 2024 targets while maintaining a solid financial position.”
To reward investors, BNP Paribas raised its dividend by 4.1% to €4.79 per share and launched a €1.08 billion share buyback programme for Q2 2025.
UBS recorded a net profit of $770 million (€745 million) for Q4, reversing a $279 million (€270 million) loss from a year earlier.
Despite returning to profitability, UBS missed analyst forecasts, with earnings per share at $0.23 (€0.22) instead of the expected $0.30 (€0.28).
Revenue increased to $11.64 billion (€10.75 billion), but still fell short of market estimates of $11.17 billion (€10.32 billion).
UBS declared a $0.90 per share dividend and announced a $1 billion (€920 million) share buyback for H1 2025, with $2 billion (€1.85 billion) planned for H2.
CEO Sergio Ermotti reassured investors about the Credit Suisse integration, stating: “We are making strong progress and remain confident in meeting our financial targets by 2026.”
However, UBS faces rising regulatory capital requirements following the Credit Suisse collapse, potentially impacting future returns.
In its quarterly report, UBS warned that Switzerland’s proposed capital reforms could increase costs and add uncertainty to its long-term outlook.