Good afternoon, ladies and gentlemen, and welcome to the presentation of the BNP Paribas first quarter 2026 results with Jean-Laurent Bonnafé, Group Chief Executive Officer, and Lars Machenil, Group Chief Financial Officer. I would now like to hand the call over to Jean-Laurent Bonnafé, Group Chief Executive Officer. Please go ahead, sir.
Thank you. Good afternoon, ladies and gentlemen. We're pleased to present a strong first quarter, which confirms we are well on track for our previously announced 2026 and 2028 trajectories. Our presentation will be short because it seems that today is a busy day. On slide 4, you can see our first quarter results continued the sharply positive trend we showed in the previous quarter. Revenue rose at a very strong rate of 8.5%. FX effect was at highest three points, and our cost income ratio improved point points compared to the first quarter 2025. As a result, our gross operating income was up a significant 13.7% this quarter. Cost of risk reached 39 bps within our trajectory of less than 40 bps through the cycle.
All in all, our net profit was up 9%, confirming our very positive momentum. Our CET1 reached 12.8%, up 20 basis points this quarter, and we're getting very close to our CET1 target of 13% for 2027. Let me also remind you that our final 2025 dividend of EUR 2.57 will be paid on 20th May. If we focus on our revenues, they are up 8.5% with well-balanced growth between the businesses. CIB revenues were broadly stable but were impacted by unfavorable FX impact, a high base effect, and perhaps a slightly less favorable geographical mix than our U.S. peers. The base for the second quarter is a lot more favorable. CPBS revenue sustained a strong upward trend, confirming the pivot we described in the fourth quarter last year.
Finally, IPS generated double-digit organic growth, but also benefited from the AXA IM integration, leading to a transformational 33% increase in revenues. Slide 5 now. The first quarter built on an already strong end to 2025, with revenues up 7.3%. This very strong top-line growth reflects the strong momentum we expected and shared with you last year. It also translate into sharp increase in profitability. You will have noticed that our Eurozone commercial banks grew their pre-tax profit by a strong 19% and Personal Finance, 23%. Our deposit mix remains stable, which enables the reinvestment of our non-remunerated sight deposits on the mid to long end of the curve. Given the current economic outlook, we expect this positive environment to continue well into the next strategic plan, which will take us to 2030.
CPBS profitability will also improve substantially, thanks to the strategic plans that are already well underway, demonstrating our ability to execute transformative change programs at pace. New plans for Belgium, Italy, and Arval/Athlon will be launched by year end. This is well illustrated on slide six. After a strong first quarter, we reconfirm both our 2026 and 2028 trajectories. This will be amplified at EPS level by our share buybacks. We expect more than 10% earning growth CAGR over 2025, 2028. We expect our return on tangible equity to exceed 30% in 2028. This will be driven by strong revenue momentum, very well illustrated in the first quarter, but also tight cost control. We will discuss the costs later. You see on the right that we are well underway with our strategic plans.
We have already presented the plans for personal finance, CPBF in France, Bank Polska, and asset management. Next will be CPBB in Belgium, followed in the second half by Arval and BNL. These plans cover most of CPBS and half of the group's risk-weighted assets. They have in common a very ambitious cost income ratio improvement trajectory, as well as tight risk weight control. Overall, we expect our cost income ratio to fall below 56% in 2028, with more improvement to come by 2030. Finally, our CET1 at 12.8% shows that we are well on track to achieve our trajectory at 13% by end 2027, which excess capital to be considered for distribution on an annual basis. Moving on to slide 7, let me remind me about our thought process regarding the transformation plan for our support functions.
We are strengthening our foundations ahead of our 2027/2030 plan. The comprehensive review of our support functions will pool and streamline our application portfolio, amplify the use of AI, and simplify organization, reducing silos. The support functions account for about half of our cost base. We expect that our action will help accelerate our cost savings for about EUR 700 million per year over 2022-2026 to close to EUR 1 billion per year over 2027-2030. All divisions, geographies, and functions will be impacted by our actions. Let me now hand over to Lars, who will present our first quarter results.
Thank you, Jean. Good afternoon, everybody. It's a busy day for you all, so I will focus on the key points. I will not spend much time on slide 10, but I wanted to highlight that there are a few exceptional items this quarter, which together accounted for EUR 109 million, very close to the level we saw last year and accounting for 3% of our earnings. This suggests that reported and underlying growth are aligned. In particular, the exceptional elements this quarter are booked mostly in the corporate center, whereas last year they were included for half in the business line. In the comparison, you have to take that into account.
If I highlight some of them this quarter, there is a EUR 372 million gain on [Allfunds] coming from the reclassification of our stake following the loss of significant influence in the company. Secondly, there is a pre-tax income charge of EUR 219 million from U.K. Motor Finance, which is reduced to EUR 98 million after tax, given also minority interests. Finally, there is EUR 262 million restructuring charges, reflecting, in particular, the acceleration of the AXA IM integration, as we mentioned before. Let me now move to slide 12, where you see that our revenues are up 8.5% or 8.1% at constant scope and exchange rates.
The two main elements this quarter are the strong impact of Forex, notably the U.S. dollar, and the integration of AXA IM impacting the year-on-year comparison as it was not part of the group a year ago. Let me comment on CIB first. The revenues are reported stable but are up 3.1% at constant exchange rates. Our underlying performance in the U.S. is particularly strong and similar to what you saw with U.S. local banks. Looking at CIB, you will see that our market shares and rankings underscore a solid quarter, even against a strong first quarter of 2025, also the Forex impact that I mentioned, and European markets that were slower compared to the U.S.
If you now look at the sub-parts of CIB, starting with Global Banking, there was a high base effect given the first quarter of 2025, we saw this quarter the impact of lower rates and Forex, but the business had strong momentum, as you can see in the market share and the ranking gains. Particularly, if you look at India, we maintain our leadership amongst European banks with a 5.1% market share. We look at Global Markets, where we saw that Equity and Prime Services were up strongly 9.3% at constant effects. The business benefited from high volumes, higher market levels, and very strong client engagement.
Next to EPS, if we look at FICC, it was more balanced, up 3.9% at constant Forex, with particularly strong commodities and currencies, so the 2 Cs of FICC and local markets as well, but less favorable rates and primary activities. If with this, we move to the second division, CPBS, and as Jean explained earlier, the Eurozone commercial banks are enjoying very strong top-line growth on the back of favorable interest rate environments, favorable for BNP Paribas. On the other hand, the specialized businesses benefited from strong organic growth, for example, at Arval, before used car sales, and also higher volumes and improved margins at Personal Finance.
If with this, we move to the third division, IPS, they reported, I do not know how to qualify, but a whopping 33% revenue growth, which of course reflects the integration of AXA IM compared to a year ago. The division, even if you look through the AXA IM, it's up 10% in organic growth at constant scope, thanks to the strong business momentum in each of the 3 subdivisions: insurance, asset management, wealth management. If with this, you can follow me to slide 13, let's take a look at the costs. At the bottom left, you can see that our cost grew 5.5%, only 2% when you look at constant scope and constant Forex. Our divisions posted positive jaws of 1.5 points and the group 3 points.
We are on track for substantial cost income improvements to below 56% in 2028, laying a firm foundation for our next strategic plan that will ramp up to 2030. This will be enabled in large part by the review of our support functions, as outlined by Jean earlier. These functions represent approximately half of our total cost base and providing a significant opportunity for optimization and efficiency gains. Moreover, as you see from the bottom right this time, a significant portion of the restructuring charges for AXA IM integration will be booked this year in total, EUR 400 million. Roughly half have already been taken in the first quarter. These are booked in the corporate center together with our traditional adaptation costs. If with this, we can look at our asset quality, and this you can see on slides 4 to 16.
If we start with 14. During the quarter, our cost of risk reached 39 basis points over outstanding within the guidance of below 40 basis points for a year. In the first quarter of 2026, the increase in the cost of risk is primarily driven by stage three provisions. Stage 1 and stage 2 provisions remain stable as the forward-looking provisions related to the geopolitical environment are booked in the corporate center for around EUR 60 million and broadly offset the releases we have in the business as usual to accompany the stage 3 provisions. Moreover, note on that same page that our NPL ratio stays at a low level of 1.6%, and that the group cost of risk has been managed to remain in a narrow range throughout the cycle.
Here it is important to highlight that we are diversified and not much reliant on the French economy. You know that less than 10% of our pre-tax profit that is in France. Moreover, what you saw is France showed a somewhat mixed performance in the 1st quarter, given the late budget and also related to investments, related to the elections. If you now go on to slide 15, we provide you with an overview of our strong risk control through the cycle. You see that our portfolio offers significant sectoral diversification and high exposure to investment-grade counterparties. This enables us to reduce the volatility of our cost of risk. You can also see our selective approach to private credit, which accounts for around 3% of our loan book, with 90% of that senior portfolio financing.
We have no NPLs on this segment, which is built through moderate loan to values, high diversification, and exposure to the strongest private credit players. If we now look at the cost of risk by business line, which is on slide 16, if we set aside Personal Finance, you can see that the increase in provision come mostly from global banking, from a low base and a normalization in Belgium. You can also see BNL reaching an impressive level of 13 basis points, helping its profitability to lift to 17% pre-tax return this quarter. We end on the capital on slide 17. Our common equity T1 reached 12.8%, up 20 basis points during the quarter. What drove this improvement?
30 basis points of capital generation, net of RWA growth, 20 basis points return to investors, so distribution, and the other elements for 10 basis points. Just under half is the deconsolidation of Allfunds. Moreover, you know that this week, the Ageas transaction closed earlier this week. It will generate EUR 840 million of gain that will be booked in the second quarter. Moreover, this deal, next to bringing all of the commercial relationship, it also will generate more P&L as well as capital. Moreover, as you saw yesterday, we are accelerating our disposals with the signing of BMCI. We are on track to deliver 30 to 50 basis points of disposals.
You will also have noted that our SREP requirement decreased by 10 basis points at the beginning of the year, and that the ECB decided to increase our O-SII buffer required to 2% by January 1, 2028, based on our score under its updated framework that was released earlier this week. This decision is consistent with our new trajectory of 13% by 2027 and 2028. We do not expect material acquisitions in the medium term. For reference, we remind you on this page the history of the redeployment of the capital released from the disposal of Bank of the West we sold at the right moment at a very attractive price.
If I look at it in total, I remind you there was 170 basis points of capital that have been redeployed in three waves of similar magnitude, with each wave delivering a higher ROIC than the previous one, while progressively preparing the group for the next growth cycle. Wave one was an immediate EUR 4 billion share buyback, generating a 4% yield after funding cost. Wave two involved targeted redeployment of capital over the years 2023, 2024. On one hand, selective organic investments, in particular in CIB, which reinforced the franchise you know today, as well as targeted acquisitions in IPS and CPBS with limited integration risk. Overall, this wave delivered a roughly 17% yield in 2026, in line with what we communicated in 2024, meaning, above 16%.
The third wave of redeployment of another 55 basis points of capital, with an expected return of 21% by 2029, is mainly driven by AXA IM, Athlon, and HSBC Wealth Management in Germany. That is a bit the synthesis of where we stand, and I'll now hand it back to Jean-Laurent, who will offer some final remarks and conclude our presentation.
Thank you, Lars. To conclude, our first quarter 2026 results are a very clear illustration of our equity story in action. We're delivering strong balance and resilient earnings growth. Group revenues grew by 8.5% with good momentum across all businesses. Costs remain tightly controlled, generating a strong positive cost income ratio effect and driving an early 14% increase in gross operating income and 9% increase in net profit. The performance is not exceptional or cyclical noise. It reflects execution. In CIB, we continue to gain market share and rankings. In CPBS, Eurozone commercial banks benefit structurally from the rate environment, while personal finance and Arval deliver strong organic growth. In IPS, the AXA IM integration is already translating into scale, momentum and value creation, while our core tier 1 ratio reached 12.8%.
The geopolitical situation will inevitably have an impact on our economies, with likely divergence across countries. While the duration of the conflict remains difficult to predict, it is precisely in this type of uncertain and volatile environment that BNP Paribas can demonstrate its full value that it has consistently done in the past. We enter this new cycle with growth levers already in place. We will present our 27, 2030 trajectory next year that we have not waited. Most of the group's risk weights are already covered by strategic plans currently in execution. Our priority over the coming quarters will be to execute our roadmap with discipline in line with our announcements. I've set two clear priorities. First, accelerating operational efficiency and our transformation agenda, notably through AI. Second, reaching our CET1 target of 13% as early as possible.
This concludes our presentation. We are now happy to take your questions.
Ladies and gentlemen, if you would like to ask a question, please make sure to press star one on your telephone keypad. Please lift your handset, ensure that the mute function on your telephone is switched off, and you are in a quiet area to maximize audio quality. I also would like to remind you to please limit yourself to a maximum of two questions. Again, please press star one to ask a question. First question is from Delphine Lee, JP Morgan.
Yes, good afternoon. Thank you for taking my questions. First of all, if I could ask on the Eurozone retail, where we can see that the NII is progressing nicely. Just wondering, just more big picture, if the potential increase in short-term rates could derail a little bit that in terms of, you know, changing the mix and create a bit of lag versus peers in Europe, which are maybe a little bit more sensitive to short-term rates. Just thinking a little bit about, you know, the impacts we have seen in the past and sort of what has changed. My second question is on disposals.
Considering, you know, the uncertainty in macro and because of the war, just wondering if we should expect a little bit of a delay in the delivery of that 30 to 50 basis points of disposals, impact that you're still expecting. Thank you.
Thank you for that. Yes, you are right asking for that question about short-term rates. Lars will answer that point.
Yes, Delphine. Indeed, as a reminder, what we are operating in both in Belgium and in France is in one hand that we have mortgages that have a fixed rate, and at the same time we have side deposits, non-remunerated, that we redeploy over that same period. That's why we've guided that as long as there is a steepening of the curve and the short end is, let's say, between 2% and 3%, that basically generates a lift of around 5% every quarter. Every quarter when you compare it to the year before, that's gonna be 5%, and that's gonna continue, let's say, until the end of the decade. That's the situation where we stand. As long as the short end, let's say, remains between 2% and 3%, we feel comfortable with that outlook.
About disposals, looking at what happened recently, we are rather accelerating the, I would say, the exit and we're screening a number of different options. We do not see or we do not feel so far anything new in terms of values of the assets that could be potentially considered in that program. So far, so good.
Great. Thank you very much.
Next question is from Tarik El Mejjad, Bank of America.
Hi, good afternoon. Just following up on the first question about the impact on rates and environment on your revenue growth targets. I mean, thanks for the indication on the short end of the rates, I mean, short rates impact on margins. What about the volumes and the growth and sentiment? I mean, I'm sure you are working now in the middle of your long-term plan and what kind of assumptions or view you think of the different components of impacts on growth and how that will feature within your overall expectations. Second question is on the O-SII disclosure, I think it was yesterday or day before.
Did the 50 basis points came as a surprise, and the fact that actually it came higher than the G-SIB? In the future, managing your balance sheet and size and versus the incremental capital, buffers charge, is there any more optimization that would come as you did for the G-SIB, in the past? Thank you.
On the first point, looking at commercial banks, typically in that kind of an environment when growth is slightly down, at least in the countries in which we are operating, France, Belgium, Italy, so on, there's a tendency to see additional savings. In those markets, volumes in savings are the key dimensions. We do not believe this will have an impact looking at the volumes within the commercial banks. Looking at Personal Finance is slightly different because when short-term rates are slightly higher, we tend to adapt the risk approach. In doing so, we restrain a little bit the growth.
I would say to make it simple, as of today, looking ahead, considering I would say reasonable scenarios, we do not see much impact knowing that at personal finance this is slightly different because one day you can have to opt for something slightly more stringent in terms of risk policy, and then you are restricting a little bit volumes. On the second question, to some extent there is nothing new, because as you know, the certain percent is not the target. The new target is not the result of the regulation or the supervision. This is a fact, we ultimately considered that was, I would say, looked at by investors markets, and we were supposed to be at 13%, and we decided to be at 13%.
It was a kind of new normal, I don't know. This was a request, let's say, in the financial markets coming from financial investors. This is the 13%. You have the regulation. One way or the other, the global [CE] buffer that is today at 150 basis points would have reached, looking at the growth of CIB, 200 basis points. The 13% target is something that is valid starting end of 2027 down to 2030. In that trajectory, one way or the other, you will have seen the CE buffer moving from 150 up to 200 basis points. At the end of the day, the O-SII buffer, the one coming from the ECB, not the SSM typically, but the ECB, is just something that is coming in advance.
What is important for us is you take the maximum of the two. You do not add the two buffers. It's the highest that you take into account when you do the computation for the request at group level. Away from the O-SII announcement or adaptation, in any case, we would have reached 100 basis points through the global CET1 buffer. The certain percent is a given factor, I would say, no choice. This is the market. The other is a kind of double mechanism, one being the European one being the global one. In any case, at the end of the day, you are 200. The 30% again are valid for the next plan, and they are covering, as you can see, this add-on of 50 basis points.
Yeah. Thank you.
Next question is from Giulia Aurora Miotto, Morgan Stanley.
Yes. Hi, good afternoon. Thanks for taking my questions. One more on capital, please. CET1 is at 12.8, BNP generates capital every quarter, plus you've got the disposals. When we see on this slide the 6%, 13% in end of 2027, 2028, why is that not also end of 2026? Is there any headwind coming or, you know, we can just assume that it will hit 13% sooner than what's planned there? Secondly, I noticed in the appendices on Arval that basically you call out a marked deterioration in a used car results in March, I was wondering if that continues into Q2, if we should have any special impact in mind for Arval. Thank you.
On the 13% target, we set the target for end of 2027. Away from any exceptional items, looking at the situation as of today, we could, I would say, reach the 13% by year-end. This is the normal trajectory. We said end of 2027, 30%. Looking at the good, I would say, trajectory, the second part of last year, the last quarter of last year and the first quarter of this year, we can say 13% by year-end. This is typically a target we will try to deliver away from any, of course, exceptional events. The fact that we said end of 2027 was very much linked to the, I would say, the fact that we had to start the process.
The process started last year, and it's progressing well. If you look at the trajectory, we should reach the 13%. In any case, we are doing everything we can to release the 13% by year-end. This is the story.
Just as a complement, remember when we gave our guidance, we took a conservative stance that there could be 10 basis points coming from regulatory and supervisory, which so far we haven't seen. On your other question on the resale value of secondhand cars at Arval. What indeed, you saw in March is, given the environment probably in the Middle East, you saw a pickup in demand for electric vehicles and a lower demand for thermal vehicles. That is a bit what you see. We have, at this stage, a tad more internal combustion vehicles than electric vehicles. Here the interesting point is that with the integration to come of Athlon, which has a higher fraction of electric vehicles, that trend will become even better.
That is the situation, Giulia, on, the, on Arval. Okay. Thank you.
Next question is from Andrew Coombs, Citi.
Just one follow on, please, and then a fresh question. On the capital point, and I mean to allude to the previous question, it looks like you're going to hit the 13% year early, potentially. If that does prove to be the case, given you said no material acquisitions, only 2% organic RWA growth per annum, would you consider revising the 60% payout policy at year-end, if you hit that target earlier than expected? Second question, just on asset management. Since you did the integration, the quarterly numbers have moved around a little bit. Big increase in Q4, decrease in Q1, back to Q3 levels. Absent the market moves, is there anything to call out on performance fees? Is it a case that there's more performance fees booked in Q4? Anything you'd like to say there?
Thank you.
I'll take your question first on asset management. Within the divisions, within the division of IPS, what you have, we have recalibrated a bit. We had in the past, we had wealth and asset management as one, and now we have separated those, and then we have rephrased that because the real estate, we moved it from the other. It basically the basis that is driving that difference. On your capital. Indeed, we are on track, as you mentioned, to get to 13% as soon as we can, related to the RWAs. We are, at this stage, at 60% yield, and we said that as of the moment we are at 13, we will see what we do with the excess capital.
I guess just to revert on the former question, thank you for reminding me about the real estate shift. I mean, if I looked at it, that explains the asset management climb. Actually, I see. I'll move on from that. Don't worry. Thank you.
Next question is from Pierre Chédeville, CIC Market Solutions.
Yes, good afternoon. I want a precision regarding what you said in your conclusion, saying that the bank was well-positioned to benefit from geopolitical situation. I do not really understand what you mean. You mean in absolute terms or you mean in relative terms compared to your peers? At the end of the day, this geopolitical situation seems not good for everybody. It was not very clear, your comment there. Regarding the insurance business, you mentioned a very good performance in P&C. Could you elaborate a little bit on that? Is it due to an increase in equipment rate in your networks? Is it due to a better combined ratio?
What do you expect or should we forecast in terms of revenues with your Ageas partnerships in Belgium? Thank you very much. Looking at the insurance business typically, in the transaction with Ageas, of course, there is the capital gain, EUR 140 million, an add-on of 5 basis points in the core equity tier one. An additional EUR 40 million every year in net result post-tax compared to the previous situation. Looking at the business in Belgium, this will go also with a strong investment plan. All together, the bank in Belgium and the insurance company in Belgium, AG Insurance, will invest close to EUR 80 million-EUR 100 million to grow the business within Belgium.
AG Insurance is the leader in Belgium already, but this plan encompasses also a number of investments, customer journey, digitalization, AI, and so on and so on. It's a kind, not only a renewal of the long-term contracting between the bank and the insurance business, but it's more a new cycle with additional development. This will be illustrated within the deep dive of the Belgium bank in the 2nd part of that year. Or 1st part.
June.
First of June, to be precise. About the geopolitical situation, the point was about resilience and diversification. The group is very well diversified. If you look at the story of the company, probably this is one of the banking group that offered the good level of resilience. This was basically the comment. In that context, probably a platform like BNP Paribas that is so diversified, is offering a strong level of resilience compared maybe to some other models that are more, I would say, concentrated or less diversified.
Pierre, I mean, it's not that we are protected against everything. Look at the extra cost of risk that we provisioned on the macro aspect. On your question on insurance, so on P&C, the main thing what has been performing well is all our joint ventures and activities in Latin America. Whereas in France, it's rather stable. It's even the combined ratio is that deteriorating. It is LatAm who is the All the activities we put in place that is driving it. Yep. Thank you very much.
Next question is from Matthew Clark, Mediobanca.
Good afternoon. It's a question on the 10 basis points benefit from model updates and others to CET1 this quarter. Is there any reason to think that that wouldn't be permanent? Do you see that as just a kind of like happened, I guess, in the 3rd quarter last year? It's just a favorable outcome, that's here to stay and will stick, or should we see it as part of volatility and you stick to your expectation of a 10 basis point headwind over the course of the full year, and so some normalization of that benefit and then maybe a bit more of headwind to come? Thanks.
No, Matthew, these 10 basis points are here to stay. A small part is what you've done, what we've seen with orphans, there are indeed model updates and the like. That's here to stay. What I mentioned is we took a conservative view initially, and we said, "Listen, there could be." This is permanent, there could be other elements that are regulatory or supervisory driven that we labeled in for 10 basis points. Those we see not coming, we have not had it. Those 10, they are tangible, they are here to stay.
Great. Thanks very much.
Next question is from Anke Reingen, RBC.
Yeah, thank you for taking my questions. I just wondered, in terms of your corporate customer behavior, I guess in the first quarter, you might see some different trends, and I just wondered how, yeah, Q1 sort of like ended in terms of corporate customer engagement. Are there sort of like more wait and see or very active in hedging, just in terms of overall trends? Then in terms of one number, numbers question on the Corporate Center, the Q1 performance, is there any reason to assume that should reverse in the course of the year? Thank you.
If you look at the corporate bank at CIB, year on year, the devolution is very much penalized because you have, first of all, the US dollar effect. Second, you have a rate effect. Anything that is cash management, deposit at the bank is penalized. Ultimately, last year, we were having a very high level, and this was slightly different starting in the second quarter of the first tariffs announcements. If you look ahead, starting the second quarter, we do not have any more the rate effect. That was about short terms. This is done. You do not have the US dollar effect, and you do not have the base effect. The corporate bank in the second quarter will have a much more favorable trend.
Looking at what we're having already in our hands, meaning number of transactions, situations, there is a lot coming, much more than in the first quarter. This is the situation looking at the corporate bank within CIB as of today.
Anke, I'll take your corporate center. I understand your question. I take it you're guiding to the top line. The top line that we said we've guided to be around zero for the year. You see that it is higher than this. The thing is, I have to remind you that in it, the elements are quite volatile. There is, for example, [CVA], which I remind you was negative last year. There is the liquidity charge. Same thing, it was negative last year, it's positive this year. Also in there is the effects of Allfunds. Let me be fair. The guidance of zero was conservative. This is how you should see it. Do keep in mind that there are volatile elements. The guidance of zero was very conservative.
Thank you. Next question is from Sharath Kumar, Deutsche Bank.
Good afternoon. Thank you for taking my questions. I have two. Belgium, I know you have a deep dive coming up shortly, but if I look at consensus, pre-tax RONE is around 18% versus your 20% target. What is, in your view, underestimated? If you can comment on the competitive positioning and sustainability of current NII strength, it would be helpful. Second, going back to Arval and leasing solutions, if you can decompose the moving parts in revenues. Surprised to see a 12% revenue decline despite a strong organic growth of 10% in Arval. If you can comment if there is any significant weakness in leasing or any notable FX weakness or any negative contribution from used car sales, it'd be helpful. Thank you.
I think you should rephrase at the end your question on Belgium. I'm not sure I grasped it. I'll start with Arval and leasing. Indeed what we publish is the segment, Arval and leasing, and you indeed, you see a drop in the top line, which is like, around EUR 100. If you look at what it is, first of all, as we said last year, and particularly in Arval, there was a contribution, a positive contribution of the, of the resale value of cars. The second thing, if you look at leasing, even if we don't publish separately the leasing P&L, you see the outstandings, and you see the outstandings going down a bit. You can also assume that there is some of that impact in there.
Therefore, you can assume that there is an impact of the resale value of the car, which is a couple of tens of EUR million, not EUR 100 million. On those, that's what I said earlier, in March, you saw a pickup in the demand for EVs and a lowering of ICEs, as at this stage we have more ICE, this is a bit what weighed on it. As I mentioned, going forward with the integration of Athlon, which is coming, that balance will shift more towards EVs. That's my answer on Arval and leasing. Could you rephrase your question on Belgium?
Yes. I know you have a deep dive coming up shortly, if I look at consensus pre-tax, Return on Notional Equity, it is around 18%, for the future years, whereas you have a 20% target. Wanted to understand what is underestimated by consensus. Also, if you can comment on the competitive positioning and sustainability of current NII growth.
Yes. If you look, there's a couple of things. To read the pre-tax of our Belgian activities, you always have to be quote-unquote, careful. Particularly if you look at the first quarter, the pre-tax income is gravitating around zero. You should not interpret this in whatever way it is because in Belgium next to the European banking taxes, there is also a local banking tax, which if you look at it at the level of BNP Paribas, is half of the total that we pay. That is why the profit in the first quarter is always gravitating at such a low level because of those taxes. If you look at the other elements, you see that we are positioned very well.
You know that we are a full-scale bank, providing all of the services. If we look at the market shares, we are basically number one. This is where we stay. If you, if you look at our profitability, if you look at the 1st quarter and in what we've guided, the profitability is up. One of the other elements is there is what we said earlier. Given the fact that we operate at fixed rates and in side deposits, the pickup took time to realize, and so we realized it at the end of the year. We saw it again in the 1st quarter, and therefore we are comfortable with the trend in Belgium, and we will highlight it on June 1st.
Thank you
Next question is from Chris Hallam, Goldman Sachs.
Yeah, I just have one question left again on capital build. If you're well on track to hit 13% by year-end, would you consider once again doing the buyback element of 2026 distribution early like you did in 2025? That would then give you the space to apply for excess capital distribution with Q4 results, and it shouldn't impact your in-year CET1 ratio because it's already accrued for. Thank you.
So far we have not considered this, but maybe this is an option. Thank you for the, for the idea.
You're welcome. Thank you.
We have no more questions registered at this time.
Thank you so much. Once again, we believe those results are strong, very much in line with our trajectory, not only for 2026 but for 2028. We're preparing very actively the next plan, particularly in the efficiency dimension. We know, as your question showed it again, that there is something around capital distribution, return to shareholders. If we're good, I would say, reaching the 13% by year-end, clearly, the possibility, the next plan to, I would say increase one way or the other, the level of return to shareholders is becoming more, I would say a reality every day than just a probability. We're also focusing on this dimension.
This is also going to be the result of good momentum at the top line and additional, cost efficiency, of course. These are the two major, I would say, drivers on top obviously of anything that would be, potentially, divestments within the portfolio of the company. Thank you very much again for your time, and see you soon at the end of the second quarter. All the best.
Thank you very much.
Ladies and gentlemen, this concludes the call of BNP Paribas first quarter 2026 results. Thank you for participating. You may now disconnect.