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Fundamental View
AS OF 05 Jan 2026BNP’s financial strength is based on its strong franchises across retail, commercial and investment banking, and its wide business and geographic diversification. Profitability is sound and improving, while asset quality has held up well.
Uncertainty around the financial health of the French sovereign and its ratings have the capacity to weigh on BNP’s stock price and its credit spreads. More recently, uncertainty around litigation and Sudan claims circles the bank.
Capital and leverage ratios are run tightly considering BNP’s balance sheet size.
Business Description
AS OF 05 Jan 2026- BNP is one of the most diversified banking groups in Europe, having been created from a merger of the retail/commercial bank BNP and the corporate/investment bank Paribas in 2000.
- Domestic Markets (DM) comprises the Group's four retail banking networks in the eurozone and its three specialised business lines (including leasing and digital banking). The retail banks are French Retail Banking (FRB), BNL in Italy, BNP Paribas Fortis in Belgium and BGL BNP Paribas in Luxembourg.
- International Financial Services (IFS) includes consumer finance, asset management and private banking, and subsidiaries in non-eurozone countries, including TEB in Turkey and BNP Paribas Bank Polska.
- Corporate & Institutional Banking (CIB) is a global provider of financial solutions to corporate and institutional clients and includes BNP's extensive trading and investment banking businesses.
Risk & Catalysts
AS OF 05 Jan 2026BNP Paribas remains the subject of various claims concerning the Madoff matter; amongst other claims. Litigation provisions on the balance sheet stood at €973 mn at 30 June 2025. BNP says the latest claims against it stand at $1.1 bn as of June 2025.
If there was a negative rating action on the sovereign, it is possible that BNP’s ratings will be impacted but it is difficult to say with any uncertainty. France represents around 30% of revenues and gross commitments on balance sheet and sovereign bond holdings are moderate; we discuss more below.
A U.S. court found BNP liable for $21 mn of damages to three Sudanese refugees, in connection with its alleged role in providing banking services to Sudan’s former president and enabling human rights abuses. This is immaterial for the bank, however, the concern is that the case could open the door to similar claims from other victims, via class action or individual suits.
Key Metric
AS OF 05 Jan 2026| mn | Y21 | Y22 | Y23 | Y24 | 3Q25 |
|---|---|---|---|---|---|
| Return On Equity | 8.2% | 8.2% | 9.0% | 9.3% | 9.8% |
| Total Revenues Margin | 1.8% | 1.7% | 1.7% | 1.8% | 1.8% |
| Cost/Income | 67.3% | 60.7% | 62.6% | 61.8% | 60.5% |
| CET1 Ratio (Transitional) | 12.9% | 12.3% | 13.2% | 12.9% | 12.5% |
| CET1 Ratio (Fully-Loaded) | 12.9% | 12.3% | 13.2% | 12.9% | 12.5% |
| Leverage Ratio (Fully-Loaded) | 4.1% | 4.4% | 4.6% | 4.6% | 4.3% |
| Liquidity Coverage Ratio | 143.0% | 129.0% | 148.0% | 137.0% | 138.0% |
| Impaired Loans (Gross)/Total Loans | 3.3% | 2.9% | 2.9% | 2.8% | n/a |
CreditSight View Comment
AS OF 18 Dec 2025BNP remains one of the more diversified bank names in Europe. Its strong business and geographic diversification has helped it maintain good profitability and asset quality. Earnings have been resilient, with CIB a stand-out performer. Liquidity and funding metrics look sound. Asset quality has held up well, although an outlier is the group’s personal finance business. The latter is being restructured, to focus more on auto finance rather than personal lending. BNP’s capital position is tight but it has increased its target going through to 2027. It is looking to expand now in insurance and asset management, likely to grow fee income. BNP is expected higher net income in the next few years from 2025. Several litigation overhangs exist; we maintain a Rich view on its AT1.
Recommendation Reviewed: December 18, 2025
Recommendation Changed: October 30, 2018
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