BNP Paribas CEO says bank could raise payout ratio to 70%

By Mateusz Rabiega

Oct 28 (Reuters) - French lender BNP Paribas could raise its payout ratio to 70% of annual earnings from 60% as part of an upcoming board discussion, CEO Jean-Laurent Bonnafe told analysts on Wednesday.

Earlier on Wednesday, the euro zone's largest bank by assets beat forecasts and unveiled a €1.3 billion share buyback.

"The bank... growing faster, being more competitive and profitable, will originate more free cash flow and free equity. So this is a good reason to increase the regular payout. One possibility is to... go from 60% to 70%", Bonnafe said after being asked about plans concerning excess capital distribution.

He also added that, separately from any increase in the payout ratio, the bank could also decide to return excess capital above the CET1 ratio of 13%.

European banks have enjoyed record profits since 2024, boosted by higher interest rates, leaving many with excess capital available for shareholder distributions.

Bonnafe noted that the increase, which would probably be carried out via buybacks, is one of the options at the table as the executive board will settle on the final decision in the coming weeks.

(Reporting by Mateusz Rabiega; Editing by Matt Scuffham)