BNP Paribas

BNP Paribas posted 12.2 billion euros in net income for 2025, growing 5% year over year with an 11.6% return on equity. The bank has consistently delivered double-digit returns through different economic environments, and management is targeting 13% returns by 2028. That kind of consistency is rare for a bank this size.

The bank's French retail business is seeing net interest income grow even as rates fall, thanks to a smart hedging strategy that locks in higher yields for 5 to 10 years. Its asset management arm now controls over 2.4 trillion euros after acquiring AXA's investment business. These two engines give BNP growing revenue without needing interest rates to stay high.

BNP faces ongoing litigation related to human rights abuses in Sudan, with the potential for significant legal costs. The bank paid almost 9 billion euros in fines back in 2014 for a comparable case. While BNP is appealing, this legal overhang could weigh on the stock price whenever headlines resurface.

Management has raised its 2028 profitability targets twice already, which creates high expectations. Hitting a cost-to-income ratio below 56% requires cutting into a 15 billion euro cost base while integrating AXA's asset management business. If the European economy weakens or political uncertainty in France escalates ahead of the 2027 elections, meeting these targets gets harder.