BNP Paribas tumbles after fourth-quarter results

Fourth-quarter net income declined 50% from the same period a year earlier to €1.07bn, coming in below expectations of €1.74bn. This came as the French bank set aside €645m to cover losses tied to risk on financial instruments.

These reflected the extraordinary impact of provisions on mortgage loans in Poland, provisions for litigation related to Personal Finance, and provisions for risk on receivables.

Fourth-quarter sales ticked up 0.1% to €10.9bn, versus expectations for sales of €11.4bn.

BNP also said it was pushing back its profitability target. It now expects to reach a 12% return on tangible equity by 2026, rather than 2025.

"On the strength of its diversified model, BNP Paribas should continue to grow faster than its underlying economy and to gain market share, thus offsetting a deterioration in the economic environment that is now more marked than in the economic baseline scenario," it said.

"Nonetheless, various decisions by public authorities (ECB mandatory reserves, Belgian bank levy and Belgian government bonds) marked 2023."

At 1030 GMT, the shares were down 8% at €57.53.