BNP Paribas today presented plans to cut investment banking costs by 12% by 2019 in a bid to bolster profitability and said it would quit some activities to fuel growth.
BNP Paribas has been selling non-core assets and cutting back on operations such as oil and gas financing as it seeks to achieve a target of 10% return on equity and build up capital.
Regulatory and compliance costs, and a previously announced €900m writedown on the value of its BNL Italian unit, pushed fourth-quarter net income down 51.7% to €665m.
This was lower than the average of analyst estimates of 845 million in a Reuters poll.
France's biggest bank sought to reassure investors with a common equity tier one ratio target - a key measure of financial health - of 12% by 2018 versus 10.9% at the end of 2015.
BNP Paribas reported slightly better than expected fourth quarter revenue growth, with corporate and institutional banking (CIB) revenue up 8.4%, partly thanks to a sharp increase in derivatives trading.
Pre-tax income fell 9%, reflecting a rise in regulatory costs.
BNP Paribas said it planned to generate €1 billion in cost savings by 2019 and focus on businesses that use less capital and generate fees, such as securities services, transaction banking, and advisory businesses.
It plans to wind down "unproductive risk-weighted assets" and "right-size low-return activities" for a total amount of €20 billion.
It said it also aims to reinvest €10 billion of risk-weighted assets in existing businesses to capture market growth and gain market share.