BNP Paribas S.A.

Reported Q2 2026 group revenue was up 12% year over year, or 10.4% at constant scope and exchange rates. Operating income was up nearly 16%, and net profit was up by about one-third. Cost of risk was 39 bps, including EUR 95 million of additional Stage 2 provisions for geopolitical risk. CET1 reached 13%, up 20 bps quarter over quarter, and the group announced an interim dividend of EUR 3.23, equal to 50% of first-half 2026 EPS. By business, CIB revenue rose 13%, CPBS rose 5%, CPB rose 9%, and IPS rose 27% reported (more than 8% at constant scope). Looking ahead, management reconfirmed 2026 and 2028 trajectories, expects cost of risk below 40 bps in 2026, targets double-digit earnings and EPS growth for 2025-2028, and expects the cost/income ratio to fall below 56% in 2028; it also said excess capital above 13% will be considered for annual distribution.

Jean-Laurent Bonnafe struck a confident tone, saying the quarter showed BNP Paribas is “on the fast track” to its 2028 return and earnings goals. He emphasized balanced growth across businesses, a strong cost discipline story, and strategic execution already underway, including efficiency initiatives, AI deployment, and divisional deep dives ahead of the next strategic plan. He also framed CET1 at 13% as an important milestone that opens the door to accelerated shareholder distribution while still allowing capital build.

Lars Machenil focused on the underlying drivers of the quarter and the capital build. He highlighted the EUR 858 million capital gain from the AGI/Ageas transaction, the 39 bps cost of risk, the 1.6% reported jaws improvement (3.7 points at constant scope/exchange rates), and CET1 reaching 13% with LCR at 149% versus 125% last quarter. He also said the corporate center gross operating loss outlook improved from EUR 1.4 billion to EUR 1.2 billion for the full year, while reaffirming EUR 800 million of restructuring charges for 2026 and noting around EUR 65 billion of cumulative RWA benefit from SRT programs.

Analysts pressed management on the sustainability of Global Markets strength, the sharp rise in Global Banking RWAs, the liquidity spike, Arval residual value pressure, payout policy beyond 60%, and whether capital could support even higher payouts or more RWA growth. Management said Global Markets strength was driven mainly by equities, volatility, and ongoing investment in structured products and prime brokerage, while the Global Banking RWA increase reflected late-quarter ramp-up and should signal stronger second-half momentum. On capital, management said 13% is the key threshold: above that, excess capital will be considered annually for distribution, and the future payout policy could be higher than the current 60% plan. On Arval, they said the business is operationally growing but is being weighed by conservative residual value assumptions and weak used-car pricing, which they expect to remain a drag.