BNP Paribas has set out plans today to deliver an increased dividend payout and an improved return on equity by 2020.
The French bank is hoping that headwinds it faces, such as low interest rates and regulatory pressures, would ease by then.
BNP has been rebounding from a costly 2014 US legal settlement, reshuffling its top ranks to tighten control and restore investor confidence.
Its new targets are for a 6.5% annual rise in net income on average over the next three years, a 50% dividend payout compared to 45% in 2016, and an improved return on equity (ROE) of 10%, the bank said.
Its ROE - a measure that shows how well a bank uses shareholder money to generate profit - was 9.4% in 2016, within the 9-10% range that analysts see as necessary to cover a bank's cost of capital.
BNP's plan is based on "conservative macroeconomic assumptions" and factors in regulatory constraints which would continue to grow in the current Basel 3 framework, it said.
"Headwinds will continue to be strong at the beginning of the period before letting up in 2019-2020," the bank said.
It said its "transformation costs" would stand at €3 billion in 2017-2019, which would be financed by €3.4 billion in savings over the same period. However, a part of the costs would be paid upfront, which should delay somewhat the benefits of cost synergies.
BNP, one of euro zone's biggest banks, also reported a lower than expected rise in the fourth-quarter net profit, weighed by a goodwill impairment for its Polish unit BGZ.
BNP Paribas' fourth-quarter net income rose to €1.44 billion, more than doubling from €665m a year ago, although the result came in below the average of analyst estimates of €1.50 billion in a Reuters poll.
Group revenues rose 2% to €10.66 billion, above the poll average of €10.48 billion, as a surge in trading activity helped corporate and institutional banking revenues rise by 8%.
BNP Paribas shares have outperformed the European banking sector, up more than 50% since February last year, helped by resilient earnings, talk of growing market share on the back of retreating rivals and improving capital ratios.