BNP Paribas Q4 income doubles

paris — 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 ($1.55 billion) from a year earlier, the Paris-based bank said in a statement on Tuesday, 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 nine per cent until 2020.

Record-low interest rates and sluggish economic growth have held back 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 digitalbanking services and increase automation while also seeking to squeeze out €3.4 billion in costs company-wide. “It’s not just an effort we are doing in cost reduction,” chief financial officer Lars Machenil said in an interview with Bloomberg Television. “It’s really on making the interaction with the customer different, to digitalise it.”

BNP Paribas’s stock has posted the second-best performance in the EURO STOXX Banks Index over the past year, and touched a post-crisis peak in January.

Earnings at the French consumer-banking unit fell 36 percent from a year earlier to €177 million as loan losses increased and revenue fell. BNP Paribas also had about €130 million in costs related to job reductions in Belgium and Italy, and booked a €127 million goodwill writedown at its Polish unit.

In the US, the BancWest division reported a 2.3 percent decline in profit. — Bloomberg