BNP Paribas said, however, that its cost of risk was still low, adding that its core tier one ratio - a measure of a bank's ability to withstand shocks - stood at 12.3% at the end of December.The solvency ratio has notably benefited from the sale of the group's U.S. retail business Bank of the West for $16.3 billion. The transaction, closed on Feb. 1, will fund the bulk of the 5 billion-euro share buyback, the French bank said.
The buyback is set to be completed in two tranches with a first one worth 2.54 billion euros that has been submitted to the European Central Bank, BNP said in its statement. The proceeds from the Bank of the West sale, combined with expectations of more than 2 billion euros in added revenues from the rise in interest rates, led BNP Paribas to raise its 2025 targets.
It now sees an average annual growth in net income of more than 9% between 2022 and 2025, up from its previous forecast of more than 7%. It also expects a return on tangible equity of around 12%, compared to a previous target of more than 11%.