BNP Paribas posts profit that misses estimates, plans cost cuts

The logo of French bank BNP Paribas is seen at a stand during the Actionaria shareholders fair in Paris, on Nov 18, 2016.
The logo of French bank BNP Paribas is seen at a stand during the Actionaria shareholders fair in Paris, on Nov 18, 2016.PHOTO: AFP

PARIS (BLOOMBERG) - BNP Paribas posted fourth-quarter profit that missed estimates as earnings fell at the French consumer-banking business. The lender also laid out a multi-year plan to lower costs and boost investment in technology.

Net income doubled to €1.44 billion (S$2.18 billion) from a year earlier, the Paris-based bank said in a statement on Tuesday (Feb 7), falling short of the €1.63 billion average estimate of seven analysts surveyed by Bloomberg. BNP Paribas raised the dividend to €2.70 a share, and will target an average annual increase of more than 9 per cent until 2020.

Record-low interest rates and sluggish economic growth have dragged on consumer-banking profits at BNP Paribas and European peers.

The bank, led by chief executive officer Jean-Laurent Bonnafe, said it will spend €3 billion spread over the next three years to upgrade digital-banking services and increase automation while also seeking to squeeze out €3.4 billion in costs company-wide.