Bnp Paribas Spons Adr

Ladies and gentlemen, we are currently on hold for the presentation of BNP Paribas first quarter 2026 results, hosted by Jean-Laurent Bonafé, Group Chief Executive Officer, and Lars Maschenil, Group Chief Financial Officer. If you would like to participate to the Q&A session, please make sure to be in a quiet area. In order to ensure that all attendants are able to participate, please limit your questions to a maximum of two. Thank you for holding. The conference will start shortly. Thank you. Ladies and gentlemen, we are currently on hold for the presentation of BNP Paribas First Quarter 2026 results, hosted by Jean-Laurent Bonafé, Group Chief Executive Officer, and Lars Maschenil, Group Chief Financial Officer. If you would like to participate to the Q&A session, please make sure to be in a quiet area. In order to ensure that all attendants are able to participate, please limit your questions to a maximum of two. Thank you for holding. The conference will start shortly. . . . . . ¶¶ . . . . . Thank you. . . . . . . Thank you. Good afternoon, ladies and gentlemen, and welcome to the presentation of the BNP Paribas First Quarter 2026 results with Jean-Laurent Bonafé, Group Chief Executive Officer, and Lars Maschenil, Group Chief Financial Officer. For your information, this conference call has been recorded. Supporting slides are available on BNP Paribas IR website. During today's presentation, you will be able to ask questions by pressing star and 1 on your telephone keypad. If you would like to ask a question, please make sure to be in a quiet area. I would like to now hand the call over to Jean-Laurent Bonafet Group Chief Executive Officer. Please go ahead, sir.

Thank you. Good afternoon, ladies and gentlemen. We are pleased to present a strong first quarter which confirms we are well on track for our previously announced 26 and 28 trajectories. Our presentation will be short because it seems that today is a busy day. So on slide four, as you can see, our first quarter results continue the sharply positive trend we showed in the previous quarter. Revenue rose at a very strong rate of 8.5%. Joe's effect was a high three points and our cost income ratio improved two points compared to the first quarter, 25. As a result, our gross operating income was up a significant 13.7% this quarter. Cost of risk reached 39 bps within our trajectory of less than 40 bps through the cycle. All in all, our net profit was up 9%, confirming our very positive momentum. Our CT1 reached 12.8%, up 20 basis points this quarter, and we're getting very close to our CT1 target of 13% for 27. Let me also remind you that our final 25 dividend of 2.57 euros will be paid on 20th May. If we focus on our revenues, they are up 8.5%, with well-balanced growth between the businesses, CAB revenues were broadly stable, but were impacted by unfavorable FX impact, a high-base effect, and perhaps a slightly less favorable geographical mix than our US peers. The base for the second quarter is a lot more favorable. CPBS revenues sustained a strong upward trend, confirming the pivot we described in the fourth quarter last year. And finally, IPS generated double-digit organic growth, but also benefited from the AXA-IM integration, leading to a transformational 33% increase in revenues. Slide five now. The first quarter built on an already strong earn to 25 with revenues up 7.3%. This very strong top line growth reflects the strong momentum we expected and shared with you last year. It also translates into a sharp increase in profitability. You will have noticed that our Eurozone commercial banks grew their pre-tax profit by a strong 19% and personal finance 23%. Our deposit mix remains stable, which enables the reinvestment of our non-reminerated side deposits on the mid to long end of the curve. Given the current economic outlook, we expect this positive environment to continue well into the next strategic plan, which will take us to 2030. CPBS profitability will also improve substantially thanks to the strategic plans that are already well underway, demonstrating our ability to execute transformative change programs at pace. New plans for Belgium, Italy, and Aval Aslan will be launched by year end. This is well illustrated on slide six. After a strong first quarter, we reconfirmed both our 26 and 28 trajectories. We expect more than 10% earning growth CAGR over 2025-2028, and this will be amplified at EPS level by our share buybacks. We expect our return on tangible equity to exceed 30% in 2028, and this will be driven by strong revenue momentum, very well illustrated in the first quarter, but also tight cost control. We will discuss the costs later. You see on the right that we are well underway with our strategic plans. We have already presented the plans for personal finance, CPBF in France, Bank Polska, and asset management. Next will be CPBB in Belgium, followed in the second half by Arval and BNL. These plans cover most of CPBS and half of the group's risk-weighted assets. They have in common a very ambitious cost-income ratio improvement trajectory, as well as tight risk-weight control. Overall, we expect our Cost Income Ratio to fall below 56% in 2028, with more improvement to come by 2030. Finally, our CT1 at 12.8% shows that we are well on track to achieve our trajectory at 17% by 2027, with excess capital to be considered for distribution on an annual basis. Moving on to slide 7, let me remind me about our thought process regarding the transformation plan for our support functions. While strengthening our foundations ahead of our 27-2030 plan, the comprehensive review of our support functions will pull and streamline our application portfolio, amplify the use of AI, and simplify organization, reducing silos. The support functions account for about half of our cost base, and we expect that our action will help accelerate our cost savings for about 700 per year over 2226 to close to 1 billion per year over 2730. All divisions, geographies, and functions will be impacted by our actions. Let me now hand over to Lars, who will present our first quarter results.

Thank you, Jean-Laurent. Good afternoon, everybody. It's a busy day for you all, so I will focus on the key points. I will not spend much time on slide 10, but I wanted to highlight that there are a few exceptional items this quarter, which together accounted for 109 million euros, very close to the level we saw last year and accounting for 3% of our earnings. This suggests that reported and underlying growth are aligned. In particular, the exceptional elements this quarter are booked mostly in the corporate center, whereas last year they were included for half in the business line. So in the comparison, you have to take that into account. If I highlight some of them this quarter, there is a 372 million gain on orphans coming from the reclassification of our stake following the loss of significant influence in the company. Secondly, there is a pre-tax income charge of 219 million euros from UK Motor Finance, which is reduced to 98 million after tax given also minority interests. And finally, there is 262 restructuring charges reflecting in particular the acceleration of the AXA-IM integration as we mentioned before. Let me now move to slide 12, where you see that our revenues are up 8.5% or 8.1% at constant scope and exchange rate. The two main elements this quarter are the strong impact of Forex, notably the US dollar, and the integration of AXA-IM, impacting the year-on-year comparison, as it was not part of the group a year ago. Let me comment on CIB first. The revenues are reported stable, but are up 3.1% at constant exchange rate. and our underlying performance in the U.S. is particularly strong and similar to what you saw with U.S. local banks. When looking at our CIV, you will see that our market shares and rankings underscore a solid quarter, even against a strong first quarter of 25, and also the Forex impact that I mentioned, and European markets that were slower compared to the U.S., If you now look at the sub-parts of CIB, starting with global banking, there was a high base effect given the first quarter of 2025, and we saw this quarter the impact of lower rates and forex, but the business had strong momentum, as you can see in the market share and the ranking gains. And particularly, if you look at EMEA, we maintained our leadership amongst European banks with a 5.1% market share. If we look at global markets, where we saw that equity and prime services were up strongly, 9.3% at constant FX. The business benefited from high volumes, higher market levels, and very strong client engagement. Next to EPS, if we look at FIG, it was more balanced, up 3.9% at constant Forex, with particularly strong commodities and currencies, so the two Cs of FIG, and local markets as well, but less favorable rates and primary activities. If with this, we move to the second division, CPBS. And as Jean-Laurent explained earlier, the Eurozone commercial banks are enjoying very strong top-line growth on the back of favorable interest rate environments, favorable for BNP Paribas. On the other hand, the specialized businesses benefited from strong organic growth, for example, at Arval before used car sales, and also higher volumes and improved margins at personal financing. If it is, we move to the third division, IPS. They reported, I do not know how to qualify, but a whopping 33% revenue growth, which of course reflects the integration of AXA-IM compared to a year ago. But the division, even if you look through the AXA-IM, it's up 10% in organic growth at Consenscope, thanks to the strong business momentum in each of the three subdivisions, insurance, asset management, oil management. If we did, you can follow me to slide 13 and let's take a look at the costs. At the bottom left, you can see that our costs grew 5.5%, but only 2% when you look at constant scope and constant forex. Our divisions posted positive jaws of 1.5 points and the group 3 points. So we are on track for substantial cost income improvements to below 56% in 2028, laying a firm foundation for our next strategic plan that will ramp up to 2030. So this will be enabled in large part by the review of our support functions as outlined by Jean Laurent earlier. These functions represent approximately half of our total cost base and providing a significant opportunity for optimization and efficiency gain. Moreover, as you see from the bottom right this time, a significant portion of the restructuring charges for AXA-IM integration will be booked this year. In total, 400 million. Roughly half have already been taken in the first quarter. And so these are booked in the corporate center together with our traditional adaptation costs. If it is, we can look at our asset quality. And this you can see on slides 4 to 16. if we start with 14. So during the quarter, our cost of risk reached 39 basis points over outstanding within the guidance of below 40 basis points for a year. In the first quarter of 26, the increase in the cost of risk is primarily driven by stage three provisions. Stage one and stage two provisions remain stable as the forward-looking provisions related to the geopolitical environment are booked in the corporate center for around 60 million and broadly offset the releases we have in the business as usual to accompany the Stage 3 provisions. Moreover, note on that same page that our NPL ratio stays at a low level of 1.6% and that the group cost of risk has been managed to remain in a narrow range throughout the cycle. And here it is important to highlight that we are diversified and not much reliant on the French economy. You know, there's less than 10% of our pre-tax profit that is in France. And moreover, what you saw is France showed a somewhat mixed performance in the first quarter, given the late budget and also related to investments related to the elections. If we now go on to slide 15, we provide you with an overview of our strong risk control through the cycle. So you see that our portfolio offers significant sectoral diversification and high exposure to investment-grade counterparties. This enables us to reduce the volatility of our cost of risk. You can also see our selective approach to private credit, which accounts for around 3% of our loan book, with 90% of that senior portfolio financing. We have no NPLs on the segment, which is built through moderate loan-to-values, high diversification, and exposure to the strongest private credit players. And if we now look at the cost of risk by business line, which is on slide 16, and if we set aside personal finance, you can see that the increase in provision come mostly from global banking, from a low base and a normalization in Belgium. You can also see B&O reaching an impressive level of 13 basis points, helping its profitability to lift to 17% pre-tax return this quarter. If we now, we end on the capital on slide 17. A common equity T1 reached 12.8%, up 20 basis points during the quarter. So what drove this improvement? 30 basis points of capital generation, net of RWE growth, 20 basis points return to investors, to distribution, and the other elements for 10 basis points. Just under half is the deconsolidation of orphans. Moreover, you know that this week, the AGEA's transaction closed earlier this week. It will generate 840 million of gain that will be booked in the second quarter. Moreover, this deal next to bringing all of the commercial relationship, it also will generate more P&L as well as capital. Moreover, as you saw yesterday, we are accelerating our disposals with the signing of BMCE. We are on track to deliver 30 to 50 basis points of disposals. You will also have noted that our SREP requirement decreased by 10 basis points at the beginning of the year, and that the ECB decided to increase our OZ with two I's buffer required to 2% by the 1st of January 2028, based on our score under its updated framework that was released earlier this week. This decision is consistent with our new trajectory of 13% by 2027. So we do not expect material acquisitions in the medium term. And for reference, we remind you on this page the history of the redeployment of the capital released from the disposal of Bank of the West. We sold at the right moment at a very attractive price. And if I look at it in total, I remind you there was 170 basis points of capital that have been redeployed in three waves of similar magnitude, with each wave delivering a higher ROEIC than the previous one, while progressively preparing the group for the next growth cycle. So wave one was an immediate $4 billion share buyback, generating a 4% yield after funding cost. Wave two involved targeted redeployment of capital over the years 2023-2024. So on one hand, selective organic investments, particularly in CIB, which reinforced the franchise you know today, as well as targeted acquisitions in IPS and CPBS with limited integration risk. Overall, this wave delivered a roughly 17% yield in 2026 in line with what we communicated in 24, meaning above 16%. And then the third wave of redeployment of another 55 basis points of capital with an expected return of 21% by 29 is mainly driven by AXA-IM, ATLON and HSBC wealth management in Germany. So that is a bit the synthesis of where we stand. And I'll now hand it back to Jean-Laurent who will offer some final remarks and conclude our presentation.