Morgan Stanley Picks Top French Banks Amid Rising Capital Buffers

Morgan Stanley reiterated a positive view on France’s largest banks, saying they can absorb higher regulatory capital buffers while sustaining earnings and shareholder returns. The broker highlighted BNP Paribas as resilient despite a planned systemic buffer increase and flagged Société Générale’s ability to handle a modest buffer rise amid restructuring and improving profitability. The note suggests limited downside to distributions and supports confidence in the French banking sector — a constructive signal for the France 40 index and bank-heavy exposures — even as intraday quotes showed BNP Paribas and Société Générale trading lower. Overall, the broker’s outlook reduces policy-related tail-risk for investors in French banks and the broader France 40 benchmark.