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BNP Paribas — Interim / Quarterly Report 2016
May 3, 2016
1158_iss_2016-05-03_6dbce8a2-4397-4289-a515-39e5d3932e81.pdf
Interim / Quarterly Report
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FIRST QUARTER 2016 RESULTS
PRESS RELEASE Paris, 3 May 2016
REVENUES HELD UP WELL IN DOMESTIC MARKETS AND INTERNATIONAL FINANCIAL SERVICES
PARTICULARLY UNFAVOURABLE MARKET ENVIRONMENT THIS QUARTER
REVENUES: -2.0% vs. 1Q15
GOOD COST CONTAINMENT
OPERATING EXPENSES: -2.3% VS. 1Q15
SIGNIFICANT DECREASE IN THE COST OF RISK
43 BP* (-27.5% VS. 1Q15)
RISE IN NET INCOME
NET INCOME GROUP SHARE: €1,814M (+10.1% VS. 1Q15)
FURTHER INCREASE IN THE BASEL 3 CET1 RATIO**
11.0% (+10 BP VS. 31.12.15)
SOLID ORGANIC CAPITAL GENERATION
* NET PROVISIONS/OUTSTANDING CUSTOMER LOANS; ** AS AT 31 MARCH 2016, CRD4 ("FULLY LOADED" RATIO)
The Board of Directors of BNP Paribas met on 2 May 2016. The meeting was chaired by Jean Lemierre and the Board examined the Group's results for the first quarter 2016.
SOLID ORGANIC CAPITAL GENERATION IN A CHALLENGING ENVIRONMENT THIS QUARTER
Thanks to the diversity of its geographies and of its business units, all focused on serving clients, BNP Paribas reported this quarter good revenues resilience despite a particularly unfavourable environment: interest rates still low, stock market crisis, wait-and-see attitude by debt investors.
Revenues totalled 10,844 million euros, down by 2.0% compared to the first quarter 2015. They included the one-off impact of +365 million euros in Own Credit Adjustment (OCA) and own credit risk included in derivatives (DVA) (+37 million euros in the first quarter 2015).
As for the operating divisions, revenues held up well compared to the first quarter 2015 at Domestic Markets1 (-0.7% with a decline in financial fees) and International Financial Services (-0.7% due to the spot effect of the stock market crisis on Insurance's financial statements) but were down by 18.9% (15.5% excluding FVA) at CIB because of the sharp decrease in the revenues of Global Markets.
Operating expenses, at 7,627 million euros, were well under control and down by 2.3% compared to the first quarter 2015. They included the one-off impact of the acquisitions' restructuring costs and the CIB transformation plan's costs for a total of 46 million euros (20 million euros in the first quarter 2015). They no longer included this quarter any Simple & Efficient transformation costs (110 million euros in the first quarter 2015): in line with the objective, the last costs related to this plan were booked in the fourth quarter 2015.
Operating expenses were up by 2.3% for Domestic Markets1 and 2.2% for International Financial Services but down by 8.8% for CIB as a result of lower business activity this quarter. Based on the IFRIC 21 "Levies" interpretation, they included the entire increase in banking contributions and taxes for 2016 (+1.0% impact on the operating expenses of the operating divisions). They benefited from the success of the Simple & Efficient savings plan but factored in the implementation of new regulations and the reinforcement of compliance.
The gross operating income of the Group was thus down by 1.2%, at 3,217 billion euros.
The cost of risk was however significantly lower, in particular thanks to the good control of risks at loan origination, the low interest rate environment and the improvement recorded in Italy. It came to 757 million euros (1,044 million euros in the first quarter 2015) or 43 basis points of outstanding customer loans.
Non operating items totalled +178 million euros (+339 million euros in the first quarter 2015 due to the one-off +67 million euro dilution capital gain from the merger between Klépierre and Corio and a +94 million euros capital gain from the sale of a non-strategic stake).
Pre-tax income thus came to 2,638 million euros compared to 2,552 million euros in the first quarter 2015 (+3.4%).
Net income attributable to equity holders was thus 1,814 million euros, up by 10.1% compared to the first quarter 2015. Excluding one-off items, it came to 1,607 million euros (+4.0%).
1 Including 100% of Private Banking in Domestic Markets (excluding PEL/CEL effects)
The annualised return on equity, excluding one-off items, equalled 9.4%. The annualised return on tangible equity, excluding one-off items, was 11.2%. The annualised return on equity calculated on the basis of a CET1 ratio of 10% is 10.1%, in line with the target of the 2014-2016 plan.
As at 31 March 2016, the fully loaded Basel 3 common equity Tier 1 ratio1 was 11.0%, up by 10 basis points compared to its level on 31 December 2015, illustrating solid organic capital generation. The fully loaded Basel 3 leverage ratio2 came to 4.0% (stable compared to 31 December 2015).
The Liquidity Coverage Ratio stood at 116% as at 31 March 2016. Lastly, the Group's immediately available liquidity reserve totalled 298 billion euros (compared to 266 billion euros as at 31 December 2015), equivalent to over one year of room to manoeuvre in terms of wholesale funding.
The net book value per share reached 71.7 euros, equivalent to a compounded annual growth rate of 6.4% since 31 December 2008, illustrating the continuous value creation throughout the cycle.
Lastly, the Group is actively implementing the remediation plan agreed as part of the comprehensive settlement with the U.S. authorities and is continuing to reinforce its compliance and control procedures.
* * *
1 Ratio taking into account all the CRD4 rules with no transitory provisions
2 Ratio taking into account all the CRD4 rules at 2019 with no transitory provisions, calculated according to the delegated act of the European Commission dated 10 October 2014
RETAIL BANKING & SERVICES
DOMESTIC MARKETS
In a context of gradual recovery of economic growth in Europe, Domestic Markets' outstanding loans rose by 1.2% compared to the first quarter 2015. Deposits were up by 3.9% with good growth across all the networks. Hello Bank! continued its business development and won 103,000 new clients this quarter. Furthermore, Arval actively implemented the integration of GE Fleet Services in Europe acquired in November 2015.
Revenues1 , at 3,963 million euros, were down slightly by 0.7% compared to the first quarter 2015 due to the persistently low interest rate environment and the decline of financial fees caused across all the networks by the very unfavourable market environment this quarter. BRB and the specialised businesses, however, posted a good performance and grew their revenues.
Operating expenses1 (2,818 million euros) were up by 2.3% compared to the same quarter last year. At constant scope and exchange rates, they rose by 1.5% driven by the development of the specialised businesses.
Gross operating income1 was thus down by 7.3%, at 1,145 million euros, compared to the same quarter last year.
The cost of risk was, however, down across all the networks, as a result of the low interest rate environment. It was down in particular at BNL bc in line with expectations.
Thus, after allocating one-third of Domestic Markets Private Banking's net income to the Wealth Management business (International Financial Services division), the division reported 3.7% growth in its pre-tax income2 compared to the first quarter 2015, at 690 million euros.
French Retail Banking (FRB)
FRB's outstanding loans were down by 2.7% compared to the first quarter 2015 due to the impact of early repayments and despite a rise in loan production at the end of the period. FRB continued to bolster the commercial offering to speed up the growth of volumes. Deposits grew by 1.5%, driven by the strong rise in current accounts. Following its success in 2015, the entrepreneurship supporting programme, BNP Paribas Entrepreneurs, is renewed in 2016 and includes in particular 10 billion euros in financing.
Revenues3 totalled 1,643 million euros, down by 1.8% compared to the first quarter 2015. Net interest income was down by 0.7% given the impact of persistently low interest rates. Fees were down for their part by 3.3% due to the decline in financial fees as a result of the very unfavourable market environment this quarter.
Operating expenses3 , which were well under control, rose by only 0.8% compared to the first quarter 2015 despite the rise in taxes and regulatory costs.
Gross operating income3 thus stood at 470 million euros, down by 7.8% compared to the same quarter last year.
The cost of risk3 , at 73 million euros, was down 15 million euros compared to the first quarter 2015. Still at a low level, it was only 21 basis points of outstanding customer loans.
1 Including 100% of Private Banking in France (excluding PEL/CEL effects), Italy, Belgium and Luxembourg
2 Excluding PEL/CEL effects
3 Including 100% of Private Banking in France (excluding PEL/CEL effects)
Thus, after allocating one-third of French Private Banking's net income to the Wealth Management business (International Financial Services division), FRB posted 359 million euros in pre-tax income1 (-5.6% compared to the first quarter 2015), which reflected good resilience in the challenging environment this quarter.
BNL banca commerciale (BNL bc)
In a gradually improving economic environment, outstanding loans were up very slightly compared to the first quarter 2015 (+0.1%) with gradual recovery in demand, in particular from individual clients. Deposits rose by 11.7% with a sharp rise in individuals' current accounts. BNL bc delivered a good performance in off balance sheet savings with growth of life insurance outstandings (+10.1%) and mutual funds (+7.2%) compared to 31 March 2015. Private Banking continued its business development with 1.2 billion euros in assets inflows this quarter.
Revenues2 were, however, down by 8.9% compared to the first quarter 2015, at 737 million euros. Net interest income was down by 10.8% due to the persistently low interest rate environment and the repositioning on the better corporate clients. Fees were down 5.2% as a result of the drop in financial fees due to the very unfavourable trend in financial markets this quarter.
Operating expenses2 , at 462 million euros, were down by 0.5%. They were down by 0.8% excluding the impact of the rise in banking contributions and taxes, due to operating efficiency measures.
Gross operating income2 thus totalled 275 million euros, down by 20.3 % compared to the same quarter last year.
The cost of risk2 , at 142 basis points of outstanding customer loans, continued its decline (-47 million euros compared to the first quarter 2015) with a gradual improvement of the quality of the loan portfolio and a decrease in doubtful loan outstandings.
Thus, after allocating one-third of Italian Private Banking's net income to the Wealth Management business (International Financial Services division), BNL bc thus posted 8 million euros in pre-tax loss (13 million euros in profit in the first quarter 2015).
Belgian Retail Banking
BRB generated a good operating performance. Loans were up by 4.5% compared to the first quarter 2015 with growth in loans to individual customers, in particular mortgage loans, and increased loans to SMEs. For their part, deposits rose by 4.1% thanks in particular to a good growth in current accounts. The business continued to develop digital banking and new customer journeys with the launch of an app to manage prepaid cards.
Revenues3 were up by 2.3% compared to the first quarter 2015, to 917 million euros: net interest income rose by 5.6%, thanks to increased volumes and margins holding up well ; fees were down by 6.7% as a result of the drop in financial fees due to a very unfavourable market context this quarter.
Operating expenses3 rose by 2.3% compared to the first quarter 2015, to 791 million euros. Excluding the impact of the rise in banking contributions and taxes, they rose by only 1.2%.
Gross operating income3 , at 126 million euros, was thus up (+2.3%) compared to the same quarter last year.
1 Excluding PEL/CEL effects
2 Including 100% of Private Banking in Italy
3 Including 100% of Private Banking in Belgium
The cost of risk1 , at 21 million euros, was very low (9 basis points of outstanding customer loans). It was down by 13 million euros compared to the first quarter 2015.
After allocating one-third of Belgian Private Banking's net income to the Wealth Management business (International Financial Services division), BRB posted 88 million euros in pre-tax income, up sharply compared to the same quarter a year earlier (+47.7%).
Other Domestic Markets businesses (Arval, Leasing Solutions, Personal Investors and Luxembourg Retail Banking)
The business activity of Domestic Markets' specialised businesses showed a good drive. Arval's financed fleet posted strong organic growth (+10.6%2 compared to the first quarter 2015), confirming its leading position in Europe. The business also continued the integration of GE Fleet Leasing Services in Europe3 . There was a rise in outstandings of the core portfolio of Leasing Solutions, partially offset however by the continued reduction of the non-core portfolio. Personal Investors enjoyed a good level of new client acquisition.
Luxembourg Retail Banking's outstanding loans grew by 2.9% compared to the first quarter 2015 due in particular to growth in mortgage loans. Deposits were up by 7.5% with good deposit inflows on the corporate segment.
Revenues4 were up on the whole by 9.0% compared to the first quarter 2015, at 666 million euros, recording the effect of the acquisition of GE Fleet Leasing Services in Europe. At constant scope and exchange rates, it rose by 4.0%, driven by Arval, Leasing Solutions and Luxembourg Retail Banking.
Operating expenses4 rose by 10.8% compared to the first quarter 2015, to 393 million euros. At constant scope and exchange rates and excluding the impact of the rise in banking contributions and taxes, they rose by 3.6%, due to business development.
The cost of risk4 was down 16 million euros compared to the first quarter 2015, at 31 million euros.
Thus, after allocating one-third of Luxembourg Private Banking's net income to the Wealth Management business (International Financial Services division), the pre-tax income of these four business units was 251 million euros, up sharply compared to the first quarter 2015: +18.1% (+16.3% at constant scope and exchange rates).
1 Including 100% of Private Banking in Belgium
2 At constant scope
3 Acquisition completed on 2 November 2015
4 Including 100% of Private Banking in Luxembourg
* * *
INTERNATIONAL FINANCIAL SERVICES
The International Financial Services' businesses showed a good commercial activity: Personal Finance continued its good business drive; Europe-Mediterranean and BancWest posted sustained growth of activity; Insurance and Wealth and Asset Management generated positive asset inflows (2.2 billion euros) in a challenging market environment this quarter.
At 3,696 million euros, revenues were however down by 0.7% compared to the first quarter 2015, due to an unfavourable foreign exchange effect. They were up by +1.7% at constant scope and exchange rates thanks to the good performance of Europe-Mediterranean and BancWest, growth at Personal Finance and Wealth and Asset Management and despite the spot effect of the unfavourable market environment on Insurance's financial statements this quarter.
Operating expenses (2,442 million euros) were up by 2.2% compared to the same quarter last year. At constant scope and exchange rates, they were up by 4.1% as a result of business growth.
Gross operating income thus totalled 1,254 million euros, down by 5.9% compared to the same quarter last year (-2.8% at constant scope and exchange rates).
The cost of risk stood at 339 million euros, down sharply by 26.6% compared to the first quarter 2015.
International Financial Services' pre-tax income was thus up strongly at 1,052 million euros (+6.8% compared to the first quarter 2015 and +8.1% at constant scope and exchange rates).
Personal Finance
Personal Finance continued its good sales and marketing drive. Outstanding loans grew by +7.4%1 compared to the first quarter 2015 in connection with the rise in demand in the Eurozone. The business unit gained market shares in the main European markets (Germany, Italy, Belgium). It renewed commercial partnerships (M. Bricolage and Ikea in France) and signed a new partnership with Samsung in Germany. It continued to develop commercial agreements in car loans (Volvo in Italy).
Revenues were down however by 1.0% compared to the first quarter 2015, at 1,149 million euros, due to an unfavourable foreign exchange effect. At constant scope and exchange rates, it grew by 1.8%, the rise in volumes being partly offset by the growing positioning on products with a better risk profile. It was driven notably by revenue growth in Germany, Italy and Spain.
Operating expenses were stable compared to the first quarter 2015, at 609 million euros. At constant scope and exchange rates and excluding the rise in banking contributions and taxes, they were up by 1.9%, on the back of business development.
Gross operating income thus totalled 540 million euros, down by 2.1% compared to the same quarter last year but up by 0.8% at constant scope and exchange rates.
At 221 million euros, or 149 basis points of outstanding customer loans, the business unit recorded a sharp decline in the cost of risk (-71 million euros compared to the first quarter 2015) due to the low interest rate environment and the growing positioning on products with a better risk profile but
1 At constant scope and exchange rates
also thanks to significant provisions write-backs this quarter following sales of doubtful loan outstandings.
Personal Finance's pre-tax income was thus 333 million euros, up sharply compared to the first quarter 2015: +20.8% (+22.5% at constant scope and exchange rates).
Europe-Mediterranean
Europe-Mediterranean's outstanding loans rose by 7.4%1 compared to the first quarter 2015 with a rise in particular in Turkey and in Poland. For their part, deposits grew by 8.0%1 , with good growth in particular in Turkey. The commercial drive of the business unit is reflected in the strong development of cross-selling in consumer lending, especially in Poland where outstandings rose by +9%1 compared to the first quarter 2015. There was good development in the digital offering with already 247,000 clients for Cepteteb in Turkey one year after its launch.
Revenues2 , at 608 million euros, were up by 8.4%1 compared to the first quarter 2015 in line with volume growth.
At 432 million euros, operating expenses2 rose by only 1.9%1 compared to the same quarter last year thanks to good cost control and implementation of the cost synergies in Poland (streamlining of the network: -118 branches compared to the same quarter last year).
The cost of risk2 totalled 96 million euros, or a moderate level of 100 basis points of outstanding customer loans. It was down 53 million euros compared to the first quarter 2015 when it stood at a high level.
Thus, after allocating one-third of Turkish Private Banking's net income to Wealth Management business, Europe-Mediterranean generated 132 million euros in pre-tax income, up sharply compared to the same quarter last year (+186.5%1 ), reflecting the good organic growth in the business.
BancWest
BancWest continued its good commercial drive in a favourable economic context. Loans rose by 7.5%1 compared to the first quarter 2015 due to sustained growth in corporate and consumer loans. Deposits were up by 5.1%1 with a strong rise in current and savings accounts. BancWest continued to expand Private Banking with assets under management totalling 10.4 billion dollars as at 31 March 2016 (+16% compared to their level as at 31 March 2015).
Revenues3 , at 773 million euros, grew by 14.7%1 compared to the first quarter 2015 on the back of volume growth and non recurring capital gains on securities sales.
At 534 million euros, operating expenses3 rose by 12.5%1 compared to the first quarter 2015 due to increase in regulatory costs (CCAR and the set up of an Intermediate Holding Company notably) and non recurring costs related to the sale process of First Hawaiian Bank. Excluding this effect, they rose by 9.4%1 due to the strengthening of the commercial set up (private banking and consumer finance).
The cost of risk3 (25 million euros) was still very low, at 16 basis points of outstanding customer loans. It was up by 5 million euros compared to the first quarter 2015.
1 At constant scope and exchange rates
2 Including 100% of Private Banking in Turkey
3 Including 100% of Private Banking in the United States
Thus, after allocating one-third of U.S. Private Banking's net income to Wealth Management business, BancWest posted good level of pre-tax income, at 221 million euros (+22.8%1 compared the first quarter 2015).
Insurance and Wealth and Asset Management
Insurance and Wealth and Asset Management's assets under management2 were down by 2.6% compared to 31 March 2015 and reached 944 billion euros as at 31 March 2016. They were down by 10 billion euros compared to 31 December 2015 on the back in particular of a negative 7.7 billion euro performance effect as a result of the unfavourable trend in the financial markets and a negative 6.8 billion euro foreign exchange effect due to the appreciation of the euro during the period, despite a positive 2.2 billion euros in asset inflows (good asset inflows at Wealth Management especially in Italy and in Asia, asset outflows at Asset Management from money market funds partly offset by diversified and equity funds, good asset inflows in Insurance in France and in Italy).
As at 31 March 2016, the assets under management2 of Insurance and Wealth and Asset Management comprised the following: Asset Management (381 billion euros), Wealth Management (325 billion euros), Insurance (217 billion euros) and Real Estate Services (22 billion euros).
In Insurance, revenues, at 456 million euros, were down by 20.8% compared to the first quarter 2015. As a part of the revenues are booked at their mark-to-market value, they included the spot impact of the decline in financial markets whereas on the contrary they included the effect of the sharp rise in stock markets in the first quarter 2015. The business unit's activity, however, was up (gross written premiums at constant scope and exchange rates: +1.0%). Operating expenses, at 309 million euros, rose by 2.7% as a result of business development and the rise in regulatory costs. At 199 million euros, pre-tax income was thus down by 37.1% compared to the same quarter last year.
Wealth and Asset Management's revenues, at 723 million euros, held up well in a challenging environment (+0.3% compared to the first quarter 2015). Operating expenses, at 567 million euros, were up slightly by 0.1% due to good cost control. At 167 million euros, Wealth and Asset Management's pre-tax income, after receiving one-third of the net income of private banking in the domestic markets, in Turkey and in the United States, was thus up by 1.7% compared to the first quarter 2015.
* * *
1 At constant scope and exchange rates
2 Including distributed assets
CORPORATE AND INSTITUTIONAL BANKING (CIB)
In a very challenging market environment in Europe in the first quarter, revenues of the business, at 2,686 million euros, were down by 18.9% (15.5% excluding FVA1 ) compared to the first quarter 2015 which benefited from a very favourable environment.
At 1,318 million euros, Global Markets' revenues were down by 24.4%2 compared to the first quarter 2015 due to a wait-and-see attitude by investors during the first two months of the year: concerns over global growth and on banking regulations combined with uncertainties over monetary policies. Client business, however, recovered significantly at the end of the period. FICC's revenues3 , at 890 million euros, were down by 13.2%2 with weak activity in forex and commodities, good performance of the rates and credit businesses, and a good resilience of the primary bond market where the business unit further strengthened its positions (ranked number 1 for all bonds in euros and number 8 for all international bonds). The revenues of the Equity and Prime Services business unit, at 428 million euros, were down by 41.2% compared to a very high base in the first quarter 2015 with weak demand for structured products in declining markets in Europe. VaR, which measures market risks, was still at a low level (43 million euros).
Securities Services' revenues, at 440 million euros, rose slightly (+0.3%) due to a decline in assets under custody (-2.7%) on the back of the decreasing markets, despite the 16.1% rise in the number of transactions. The business unit again won significant new mandates (Sampo Group, 25 billion euros in assets).
Corporate Banking's revenues, at 929 million euros, were down by 6.0% compared to the first quarter 2015 with a moderate level of business this quarter. Excluding the residual impact of the downsizing of the Energy & Commodities business conducted since 2013 and now largely completed, they were down by 3.6% due to a decline in fees on the back of the very small number of significant financing and advisory deals this quarter, despite the good performance of the transaction businesses. The business unit confirmed its number 1 position in Europe for all syndicated financing. Loans, at 126 billion euros, were up by 5.0% compared to the first quarter 2015. At 110 billion euros, deposits were up sharply (+19.5%) driven by market share gains in cash management.
At 2,258 million euros, the operating expenses of CIB were well under control despite the rise in banking contributions and taxes, and were down by 8.8% compared to the first quarter 2015, on the back of the decrease in business activity and savings generated by Simple & Efficient and the implementation of the 2016-2019 transformation plan.
The cost of risk of CIB was down by 68 million euros compared to the first quarter 2015, at 28 million euros. Corporate Banking's cost of risk was at a low level, at 55 million euros, or 19 basis points of outstanding customer loans. Global Markets recorded 27 million euros in net write-backs compared to a 23 million euro provision during the same quarter a year earlier.
Non operating items were negligible this quarter. They were substantial in the first quarter 2015 (144 million euros) due to a one-off 74 million euro capital gain from the sale of a non-strategic equity investment and high capital gains on day-to-day business operations.
CIB' pre-tax income thus totalled 403 million euros, down by 54.5% compared to the first quarter 2015. Excluding IFRIC 214 and FVA, it was at 768 million euros, down by 23.4%5 .
1 Funding Valuation Adjustment (FVA): -57 million euros in the first quarter 2016 (+68 million euros in the first quarter 2015)
2 Excluding FVA
3 Fixed Income, Currencies, and Commodities
4 Annualisation of the taxes and contributions fully booked in the first quarter
5 Excluding the one-off capital gain of 74 million euros in the first quarter 2015
* * *
CORPORATE CENTRE
The Corporate Centre's revenues were 618 million euros compared to 209 million euros in the first quarter 2015. They factored in particular +365 million euros of own credit adjustment (OCA) and own credit risk included in derivatives (DVA) (+37 million euros in the first quarter 2015), as well as a good contribution by Principal Investments as a result of the business unit's activity.
Operating expenses totalled 182 million euros compared to 258 million euros in the first quarter 2015. They factored in 23 million euros in restructuring costs related to the acquisitions1 (20 million euros in the first quarter 2015) as well as 22 million euros in CIB transformation costs (0 in the first quarter 2015). They no longer included this quarter any transformation costs from the Simple & Efficient plan (110 million euros in the first quarter 2015): in line with the objective, the last costs related to this plan were booked in the fourth quarter 2015.
The cost of risk totalled 9 million euros (negligible in the first quarter 2015).
Non operating items totalled +31 million euros compared to +91 million euros in the first quarter 2015 when they included one-off items for a total of +87 million euro (+67 million euros dilution capital gain from the merger between Klépierre and Corio and +20 million euros for the part booked in the Corporate Centre of a capital gain from the sale of a non-strategic stake2 ).
The Corporate Centre's pre-tax income was thus +475 million euros compared to +43 million euros in the first quarter 2015.
* * *
FINANCIAL STRUCTURE
The Group's balance sheet is rock-solid.
The fully loaded Basel 3 common equity Tier 1 ratio3 totalled 11.0% as at 31 March 2016, up by 10 basis points compared to 31 December 2015, essentially due to the quarter's result after taking into account a 45% dividend pay-out ratio and despite the seasonal impact of the application of IFRIC 214 (-9 basis points).
The Basel 3 fully loaded leverage ratio5 , calculated on total Tier 1 capital, totalled 4.0% as at 31 March 2016, stable compared to 31 December 2015.
The Liquidity Coverage Ratio stood at 116% as at 31 March 2016.
The Group's liquid and asset reserve immediately available totalled 298 billion euros (compared to 266 billion euros as at 31 December 2015), which is equivalent to more than one year of room to manoeuvre in terms of wholesale funding.
1 LaSer, Bank BGZ, DAB Bank and GE LLD
2 +74 million euros in addition booked at CIB-Corporate Banking 3
Taking into account all the rules of the CRD4 directives with no transitory provisions. Subject to the provisions of Article
26.2 of Regulation (EU) No 575/2013 4 Certain banking taxes and contributions are booked for their entire annual amount in the first quarter
5 Ratio taking into account all the rules of the CRD4 directives at 2019 with no transitory provisions, calculated according to the delegated act of the European Commission dated 10 October 2014
The evolution in the Group's ratios illustrates the Group's solid organic capital generation and its capacity to manage its balance sheet in a disciplined manner according to regulatory changes.
* * *
Commenting on these results, Chief Executive Officer Jean-Laurent Bonnafé stated:
"In a particularly unfavourable market environment, the Group's revenues held up well thanks to the diversity of its geographies and businesses, all focused on serving clients. The operating expenses are well-contained and the cost of risk is down significantly.
The Group's balance sheet is rock-solid and the rise in the fully loaded Basel 3 common equity Tier 1 ratio to 11.0% testifies the good organic capital generation.
I would like to thank all the employees of BNP Paribas whose dedicated work has yet again made this rise in net income possible, in line with the target set out in our 2014-2016 plan."
CONSOLIDATED PROFIT AND LOSS ACCOUNT
| 1Q16 | 1Q15 | 1Q16 / | 4Q15 | 1Q16/ | |
|---|---|---|---|---|---|
| €m | 1Q15 | 4Q15 | |||
| Revenues | 10,844 | 11,065 | -2.0% | 10,449 | +3.8% |
| Operating Expenses and Dep. | -7,627 | -7,808 | -2.3% | -7,406 | +3.0% |
| Gross Operating Income | 3,217 | 3,257 | -1.2% | 3,043 | +5.7% |
| Cost of Risk | -757 | -1,044 | -27.5% | -968 | -21.8% |
| Costs related to the comprehensive settlement with US authorities | 0 | 0 | n.s. | -100 | n.s. |
| Operating Income | 2,460 | 2,213 | +11.2% | 1,975 | +24.6% |
| Share of Earnings of Equity-Method Entities | 154 | 137 | +12.4% | 154 | n.s. |
| Other Non Operating Items | 24 | 202 | -88.1% | -656 | n.s. |
| Non Operating Items | 178 | 339 | -47.5% | -502 | n.s. |
| Pre-Tax Income | 2,638 | 2,552 | +3.4% | 1,473 | +79.1% |
| Corporate Income Tax | -720 | -811 | -11.2% | -719 | +0.1% |
| Net Income Attributable to Minority Interests | -104 | -93 | +11.8% | -89 | +16.9% |
| Net Income Attributable to Equity Holders | 1,814 | 1,648 | +10.1% | 665 | n.s. |
| Cost/Income | 70.3% | 70.6% | -0.3 pt | 70.9% | -0.6 pt |
BNP Paribas' financial disclosures for the first quarter 2016 are contained in this press release and in the presentation attached herewith.
All legally required disclosures, including the Registration document, are available online at http://invest.bnpparibas.com in the "Results" section and are made public by BNP Paribas pursuant to the requirements under Article L.451-1-2 of the French Monetary and Financial Code and Articles 222-1 et seq. of the Autorité des Marchés Financiers' general rules.
1Q16 – RESULTS BY CORE BUSINESSES
| Domestic | International | CIB | Operating | Other | Group | ||
|---|---|---|---|---|---|---|---|
| Markets | Financial | Divisions | Activities | ||||
| Services | |||||||
| €m | |||||||
| Revenues | 3,844 | 3,696 | 2,686 | 10,226 | 618 | 10,844 | |
| %Change/1Q15 | +0.6% | -0.7% | -18.9% | -5.8% | n.s. | -2.0% | |
| %Change/4Q15 | +1.6% | -5.3% | +2.8% | -0.7% | n.s. | +3.8% | |
| Operating Expenses and Dep. | -2,745 | -2,442 | -2,258 | -7,445 | -182 | -7,627 | |
| %Change/1Q15 | +2.2% | +2.2% | -8.8% | -1.4% | -29.4% | -2.3% | |
| %Change/4Q15 | +3.8% | +1.6% | +14.3% | +6.0% | -52.2% | +3.0% | |
| Gross Operating Income | 1,099 | 1,254 | 428 | 2,782 | 435 | 3,217 | |
| %Change/1Q15 | -3.2% | -5.9% | -48.9% | -15.9% | n.s. | -1.2% | |
| %Change/4Q15 | -3.3% | -16.4% | -32.7% | -15.0% | n.s. | +5.7% | |
| Cost of Risk | -398 | -339 | -28 | -766 | 9 | -757 | |
| %Change/1Q15 %Change/4Q15 |
-18.4% -15.5% |
-26.6% -17.3% |
-70.5% -54.7% |
-26.8% -18.9% |
n.s. n.s. |
-27.5% -21.8% |
|
| Costs related to the comprehensive settlement with US authorities | 0 | 0 | 0 | 0 | 0 | 0 | |
| %Change/1Q15 %Change/4Q15 |
n.s. n.s. |
n.s. n.s. |
n.s. n.s. |
n.s. n.s. |
n.s. n.s. |
n.s. n.s. |
|
| Operating Income | 701 | 915 | 400 | 2,016 | 444 | 2,460 | |
| %Change/1Q15 | +8.2% | +5.1% | -46.1% | -10.8% | n.s. | +11.2% | |
| %Change/4Q15 | +5.3% | -16.0% | -30.3% | -13.4% | n.s. | +24.6% | |
| Share of Earnings of Equity-Method Entities | 9 | 127 | -3 | 133 | 21 | 154 | |
| Other Non Operating Items | -2 | 10 | 6 | 14 | 10 | 24 | |
| Pre-Tax Income | 708 | 1,052 | 403 | 2,163 | 475 | 2,638 | |
| %Change/1Q15 | +11.0% | +6.8% | -54.5% | -13.8% | n.s. | +3.4% | |
| %Change/4Q15 | +4.1% | -12.8% | -27.7% | -11.5% | n.s. | +79.1% | |
| Domestic | International | CIB | Operating | Other | Group | ||
| Markets | Financial | Divisions | Activities | ||||
| Services | |||||||
| €m | |||||||
| Revenues | 3,844 | 3,696 | 2,686 | 10,226 | 618 | 10,844 | |
| 1Q15 | 3,821 | 3,722 | 3,313 | 10,856 | 209 | 11,065 | |
| 4Q15 | 3,782 | 3,903 | 2,612 | 10,298 | 151 | 10,449 | |
| Operating Expenses and Dep. | -2,745 | -2,442 | -2,258 | -7,445 | -182 | -7,627 | |
| 1Q15 | -2,685 | -2,389 | -2,475 | -7,550 | -258 | -7,808 | |
| 4Q15 | -2,646 | -2,403 | -1,976 | -7,025 | -381 | -7,406 | |
| Gross Operating Income | 1,099 | 1,254 | 428 | 2,782 | 435 | 3,217 | |
| 1Q15 | 1,136 | 1,333 | 838 | 3,307 | -50 | 3,257 | |
| 4Q15 | 1,137 | 1,500 | 636 | 3,273 | -230 | 3,043 | |
| Cost of Risk | -398 | -339 | -28 | -766 | 9 | -757 | |
| 1Q15 | -488 | -462 | -96 | -1,046 | 2 | -1,044 | |
| 4Q15 | -471 | -411 | -63 | -944 | -24 | -968 | |
| Costs related to the comprehensive settlement with US authorities | 0 | 0 | 0 | 0 | 0 | 0 | |
| 1Q15 | 0 | 0 | 0 | 0 | 0 | 0 | |
| 4Q15 | 0 | 0 | 0 | 0 | -100 | -100 | |
| Operating Income | 701 | 915 | 400 | 2,016 | 444 | 2,460 | |
| 1Q15 | 648 | 871 | 742 | 2,261 | -47 | 2,213 | |
| 4Q15 | 666 | 1,089 | 574 | 2,329 | -354 | 1,975 | |
| Share of Earnings of Equity-Method Entities | 9 | 127 | -3 | 133 | 21 | 154 | |
| 1Q15 | 5 | 109 | 8 | 122 | 15 | 137 | |
| 4Q15 | 21 | 117 | 10 | 149 | 5 | 154 | |
| Other Non Operating Items | -2 | 10 | 6 | 14 | 10 | 24 | |
| 1Q15 | -15 | 5 | 136 | 126 | 76 | 202 | |
| 4Q15 | -7 | 0 | -27 | -34 | -622 | -656 | |
| Pre-Tax Income | 708 | 1,052 | 403 | 2,163 | 475 | 2,638 | |
| 1Q15 | 638 | 985 | 885 | 2,509 | 43 | 2,552 | |
| 4Q15 | 680 | 1,206 | 558 | 2,443 | -970 | 1,473 | |
| Corporate Income Tax | 205 | -158 | -3 | 44 | -764 | -720 | |
| Net Income Attributable to Minority Interests Net Income Attributable to Equity Holders |
-1 912 |
17 911 |
0 400 |
16 2,224 |
-120 -410 |
-104 1,814 |
QUARTERLY SERIES
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
|---|---|---|---|---|---|
| GROUP | |||||
| Revenues | 10,844 | 10,449 | 10,345 | 11,079 | 11,065 |
| Operating Expenses and Dep. | -7,627 | -7,406 | -6,957 | -7,083 | -7,808 |
| Gross Operating Income | 3,217 | 3,043 | 3,388 | 3,996 | 3,257 |
| Cost of Risk | -757 | -968 | -882 | -903 | -1,044 |
| Costs related to the comprehensive settlement with US authorities | 0 | -100 | 0 | 0 | 0 |
| Operating Income | 2,460 | 1,975 | 2,506 | 3,093 | 2,213 |
| Share of Earnings of Equity-Method Entities | 154 | 154 | 134 | 164 | 137 |
| Other Non Operating Items | 24 | -656 | 29 | 428 | 202 |
| Pre-Tax Income | 2,638 | 1,473 | 2,669 | 3,685 | 2,552 |
| Corporate Income Tax | -720 | -719 | -770 | -1,035 | -811 |
| Net Income Attributable to Minority Interests | -104 | -89 | -73 | -95 | -93 |
| Net Income Attributable to Equity Holders | 1,814 | 665 | 1,826 | 2,555 | 1,648 |
| Cost/Income | 70.3% | 70.9% | 67.2% | 63.9% | 70.6% |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
|---|---|---|---|---|---|
| RETAIL BANKING & SERVICES Excluding PEL/CEL Effects | |||||
| Revenues | 7,522 | 7,681 | 7,582 | 7,719 | 7,571 |
| Operating Expenses and Dep. | -5,187 | -5,049 | -4,701 | -4,636 | -5,074 |
| Gross Operating Income | 2,335 | 2,632 | 2,881 | 3,082 | 2,496 |
| Cost of Risk | -738 | -882 | -837 | -865 | -950 |
| Operating Income | 1,598 | 1,750 | 2,045 | 2,218 | 1,546 |
| Share of Earnings of Equity-Method Entities | 136 | 138 | 117 | 139 | 115 |
| Other Non Operating Items | 8 | -8 | 20 | -2 | -10 |
| Pre-Tax Income | 1,742 | 1,881 | 2,182 | 2,355 | 1,651 |
| Allocated Equity (€bn, year to date) | 48.7 | 48.4 | 48.4 | 48.3 | 47.7 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| RETAIL BANKING & SERVICES | |||||
| Revenues | 7,540 | 7,685 | 7,580 | 7,713 | 7,543 |
| Operating Expenses and Dep. | -5,187 | -5,049 | -4,701 | -4,636 | -5,074 |
| Gross Operating Income | 2,353 | 2,637 | 2,879 | 3,077 | 2,469 |
| Cost of Risk | -738 | -882 | -837 | -865 | -950 |
| Operating Income | 1,616 | 1,755 | 2,042 | 2,212 | 1,519 |
| Share of Earnings of Equity-Method Entities | 136 | 138 | 117 | 139 | 115 |
| Other Non Operating Items | 8 | -8 | 20 | -2 | -10 |
| Pre-Tax Income | 1,760 | 1,885 | 2,180 | 2,349 | 1,623 |
| Allocated Equity (€bn, year to date) | 48.7 | 48.4 | 48.4 | 48.3 | 47.7 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| DOMESTIC MARKETS (including 100% of Private Banking in France, Italy, Belgium and Luxembourg)* Excluding PEL/CEL Effects | |||||
| Revenues | 3,963 | 3,905 | 3,920 | 3,982 | 3,991 |
| Operating Expenses and Dep. | -2,818 | -2,713 | -2,526 | -2,398 | -2,755 |
| Gross Operating Income | 1,145 | 1,191 | 1,394 | 1,584 | 1,235 |
| Cost of Risk | -399 | -471 | -419 | -433 | -490 |
| Operating Income | 746 | 721 | 975 | 1,152 | 745 |
| Share of Earnings of Equity-Method Entities | 9 | 22 | 14 | 9 | 5 |
| Other Non Operating Items | -2 | -7 | -7 | -4 | -15 |
| Pre-Tax Income | 753 | 735 | 981 | 1,156 | 736 |
| Income Attributable to Wealth and Asset Management | -63 | -60 | -71 | -72 | |
| Pre-Tax Income of Domestic Markets | -70 | ||||
| 690 | 675 | 911 | 1,084 | 666 | |
| Allocated Equity (€bn, year to date) | 22.9 | 22.7 | 22.6 | 22.6 | 22.6 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| DOMESTIC MARKETS (including 2/3 of Private Banking in France, Italy, Belgium and Luxembourg) | |||||
| Revenues | 3,844 | 3,782 | 3,781 | 3,842 | 3,821 |
| Operating Expenses and Dep. | -2,745 | -2,646 | -2,459 | -2,336 | -2,685 |
| Gross Operating Income | 1,099 | 1,137 | 1,322 | 1,506 | 1,136 |
| Cost of Risk | -398 | -471 | -420 | -432 | -488 |
| Operating Income | 701 | 666 | 902 | 1,074 | 648 |
| Share of Earnings of Equity-Method Entities | 9 | 21 | 14 | 9 | 5 |
| Other Non Operating Items | -2 | -7 | -7 | -4 | -15 |
| Pre-Tax Income | 708 | 680 | 908 | 1,078 | 638 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
|---|---|---|---|---|---|
| FRENCH RETAIL BANKING (including 100% of Private Banking in France)* | |||||
| Revenues | 1,661 | 1,608 | 1,649 | 1,663 | 1,646 |
| Incl. Net Interest Income | 972 | 951 | 959 | 929 | 934 |
| Incl. Commissions | 689 | 657 | 690 | 734 | 713 |
| Operating Expenses and Dep. | -1,173 | -1,207 | -1,172 | -1,097 | -1,164 |
| Gross Operating Income | 488 | 401 | 477 | 565 | 483 |
| Cost of Risk | -73 | -88 | -79 | -87 | -89 |
| Operating Income | 415 | 313 | 398 | 478 | 394 |
| Non Operating Items | 1 | 1 | 1 | 1 | 1 |
| Pre-Tax Income | 416 | 314 | 398 | 479 | 395 |
| Income Attributable to Wealth and Asset Management | -39 | -34 | -41 | -43 | -42 |
| Pre-Tax Income of French Retail Banking | 377 | 281 | 358 | 436 | 353 |
| Allocated Equity (€bn, year to date) | 8.6 | 8.3 | 8.3 | 8.3 | 8.3 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
|---|---|---|---|---|---|
| FRENCH RETAIL BANKING (including 100% of Private Banking in France)* Excluding PEL/CEL Effects | |||||
| Revenues | 1,643 | 1,603 | 1,651 | 1,668 | 1,674 |
| Incl. Net Interest Income | 954 | 946 | 961 | 935 | 961 |
| Incl. Commissions | 689 | 657 | 690 | 734 | 713 |
| Operating Expenses and Dep. | -1,173 | -1,207 | -1,172 | -1,097 | -1,164 |
| Gross Operating Income | 470 | 396 | 479 | 571 | 510 |
| Cost of Risk | -73 | -88 | -79 | -87 | -89 |
| Operating Income | 397 | 308 | 400 | 484 | 422 |
| Non Operating Items | 1 | 1 | 1 | 1 | 1 |
| Pre-Tax Income | 398 | 309 | 401 | 485 | 422 |
| Income Attributable to Wealth and Asset Management | -39 | -34 | -41 | -43 | -42 |
| Pre-Tax Income of French Retail Banking | 359 | 276 | 360 | 442 | 380 |
| Allocated Equity (€bn, year to date) | 8.6 | 8.3 | 8.3 | 8.3 | 8.3 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| FRENCH RETAIL BANKING (including 2/3 of Private Banking in France) | |||||
| Revenues | 1,588 | 1,539 | 1,576 | 1,588 | 1,570 |
| Operating Expenses and Dep. | -1,139 | -1,173 | -1,141 | -1,065 | -1,130 |
| Gross Operating Income | 450 | 367 | 436 | 523 | 440 |
| Cost of Risk | -73 | -87 | -79 | -87 | -88 |
| Operating Income | 377 | 280 | 357 | 436 | 352 |
| Non Operating Items | 1 | 1 | 1 | 1 | 1 |
| Pre-Tax Income | 377 | 281 | 358 | 436 | 353 |
| Allocated Equity (€bn, year to date) | 8.6 | 8.3 | 8.3 | 8.3 | 8.3 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
|---|---|---|---|---|---|
| BNL banca commerciale (Including 100% of Private Banking in Italy)* | |||||
| Revenues | 737 | 781 | 763 | 797 | 809 |
| Operating Expenses and Dep. | -462 | -550 | -446 | -443 | -464 |
| Gross Operating Income | 275 | 230 | 317 | 354 | 345 |
| Cost of Risk | -274 | -300 | -309 | -318 | -321 |
| Operating Income | 1 | -70 | 8 | 36 | 24 |
| Non Operating Items | 0 | 0 | 0 | 0 | -1 |
| Pre-Tax Income | 1 | -70 | 8 | 36 | 23 |
| Income Attributable to Wealth and Asset Management | -10 | -10 | -9 | -11 | -10 |
| Pre-Tax Income of BNL bc | -8 | -80 | -1 | 24 | 13 |
| Allocated Equity (€bn, year to date) | 6.0 | 6.5 | 6.5 | 6.5 | 6.6 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| BNL banca commerciale (Including 2/3 of Private Banking in Italy) | |||||
| Revenues | 718 | 762 | 745 | 777 | 790 |
| Operating Expenses and Dep. | -453 | -541 | -437 | -434 | -455 |
| Gross Operating Income | 265 | 221 | 308 | 342 | 335 |
| Cost of Risk | -274 | -301 | -309 | -318 | -321 |
| Operating Income | -8 | -80 | -1 | 24 | 14 |
| Non Operating Items | 0 | 0 | 0 | 0 | -1 |
| Pre-Tax Income | -8 | -80 | -1 | 24 | 13 |
| Allocated Equity (€bn, year to date) | 6.0 | 6.5 | 6.5 | 6.5 | 6.6 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| BELGIAN RETAIL BANKING (Including 100% of Private Banking in Belgium)* | |||||
| Revenues | 917 | 882 | 880 | 893 | 897 |
| Operating Expenses and Dep. | -791 | -588 | -576 | -525 | -773 |
| Gross Operating Income | 126 | 295 | 305 | 368 | 123 |
| Cost of Risk | -21 | -52 | 2 | -2 | -34 |
| Operating Income | 106 | 243 | 306 | 366 | 90 |
| Share of Earnings of Equity-Method Entities | -4 | 3 | 3 | 5 | -1 |
| Other Non Operating Items | 0 | 5 | -7 | -4 | -13 |
| Pre-Tax Income | 102 | 250 | 303 | 367 | 76 |
| Income Attributable to Wealth and Asset Management | -14 | -14 | -20 | -17 | -17 |
| Pre-Tax Income of Belgian Retail Banking | 88 | 235 | 283 | 350 | 60 |
| Allocated Equity (€bn, year to date) | 4.6 | 4.5 | 4.5 | 4.5 | 4.4 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| BELGIAN RETAIL BANKING (Including 2/3 of Private Banking in Belgium) | |||||
| Revenues | 875 | 846 | 838 | 856 | 852 |
| Operating Expenses and Dep. | -763 | -565 | -551 | -506 | -747 |
| Gross Operating Income | 112 | 280 | 286 | 350 | 105 |
| Cost of Risk | -20 | -52 | 0 | -1 | -32 |
| Operating Income | 92 | 228 | 286 | 349 | 73 |
| Share of Earnings of Equity-Method Entities | -4 | 3 | 3 | 5 | -1 |
| Other Non Operating Items | 0 | 5 | -7 | -4 | -13 |
| Pre-Tax Income | 88 | 235 | 283 | 350 | 60 |
| Allocated Equity (€bn, year to date) | 4.6 | 4.5 | 4.5 | 4.5 | 4.4 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
|---|---|---|---|---|---|
| OTHER DOMESTIC MARKETS ACTIVITIES INCLUDING LUXEMBOURG (Including 100% of Private Banking in Luxembourg)* | |||||
| Revenues | 666 | 638 | 625 | 624 | 611 |
| Operating Expenses and Dep. | -393 | -368 | -332 | -332 | -354 |
| Gross Operating Income | 273 | 270 | 293 | 292 | 257 |
| Cost of Risk | -31 | -31 | -33 | -26 | -47 |
| Operating Income | 242 | 240 | 260 | 266 | 210 |
| Share of Earnings of Equity-Method Entities | 12 | 18 | 10 | 3 | 5 |
| Other Non Operating Items | -2 | -13 | 0 | 0 | -1 |
| Pre-Tax Income | 252 | 245 | 270 | 269 | 214 |
| Income Attributable to Wealth and Asset Management | -1 | -1 | -1 | -1 | -1 |
| Pre-Tax Income of Other Domestic Markets | 251 | 244 | 269 | 267 | 213 |
| Allocated Equity (€bn, year to date) | 3.8 | 3.5 | 3.4 | 3.4 | 3.3 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| OTHER DOMESTIC MARKETS ACTIVITIES INCLUDING LUXEMBOURG (Including 2/3 of Private Banking in Luxembourg) | |||||
| Revenues | 663 | 636 | 622 | 621 | 608 |
| Operating Expenses and Dep. | -391 | -366 | -330 | -331 | -353 |
| Gross Operating Income | 272 | 269 | 292 | 290 | 255 |
| Cost of Risk | -31 | -31 | -33 | -26 | -47 |
| Operating Income | 241 | 238 | 259 | 265 | 209 |
| Share of Earnings of Equity-Method Entities | 12 | 18 | 10 | 3 | 5 |
| Other Non Operating Items | -2 | -13 | 0 | 0 | -1 |
| Pre-Tax Income | 251 | 244 | 269 | 267 | 213 |
| Allocated Equity (€bn, year to date) | 3.8 | 3.5 | 3.4 | 3.4 | 3.3 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
|---|---|---|---|---|---|
| INTERNATIONAL FINANCIAL SERVICES | |||||
| Revenues | 3,696 | 3,903 | 3,799 | 3,871 | 3,722 |
| Operating Expenses and Dep. | -2,442 | -2,403 | -2,242 | -2,300 | -2,389 |
| Gross Operating Income | 1,254 | 1,500 | 1,558 | 1,571 | 1,333 |
| Cost of Risk | -339 | -411 | -417 | -432 | -462 |
| Operating Income | 915 | 1,089 | 1,141 | 1,138 | 871 |
| Share of Earnings of Equity-Method Entities | 127 | 117 | 103 | 131 | 109 |
| Other Non Operating Items | 10 | 0 | 27 | 2 | 5 |
| Pre-Tax Income | 1,052 | 1,206 | 1,272 | 1,271 | 985 |
| Allocated Equity (€bn, year to date) | 25.8 | 25.7 | 25.7 | 25.7 | 25.0 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| PERSONAL FINANCE | |||||
| Revenues | 1,149 | 1,161 | 1,174 | 1,164 | 1,161 |
| Operating Expenses and Dep. | -609 | -580 | -545 | -581 | -609 |
| Gross Operating Income | 540 | 581 | 629 | 583 | 552 |
| Cost of Risk | -221 | -309 | -287 | -288 | -292 |
| Operating Income | 319 | 273 | 342 | 295 | 260 |
| Share of Earnings of Equity-Method Entities | 13 | 21 | 22 | 15 | 17 |
| Other Non Operating Items | 1 | -1 | 0 | 2 | -2 |
| Pre-Tax Income | 333 | 293 | 364 | 312 | 276 |
| Allocated Equity (€bn, year to date) | 4.8 | 4.5 | 4.5 | 4.4 | 4.2 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| EUROPE-MEDITERRANEAN (Including 100% of Private Banking in Turkey)* | |||||
| Revenues | 608 | 626 | 617 | 663 | 609 |
| Operating Expenses and Dep. | -432 | -444 | -404 | -408 | -452 |
| Gross Operating Income | 176 | 183 | 213 | 255 | 158 |
| Cost of Risk | -96 | -96 | -112 | -109 | -150 |
| Operating Income | 80 | 87 | 101 | 146 | 8 |
| Share of Earnings of Equity-Method Entities | 50 | 46 | 44 | 42 | 42 |
| Other Non Operating Items | 2 | 1 | 0 | -2 | 1 |
| Pre-Tax Income | 132 | 134 | 145 | 186 | 51 |
| Income Attributable to Wealth and Asset Management | -1 | -1 | -1 | -1 | -1 |
| Pre-Tax Income of EUROPE-MEDITERRANEAN | 132 | 133 | 145 | 185 | 51 |
| Allocated Equity (€bn, year to date) | 5.1 | 5.4 | 5.4 | 5.4 | 5.3 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| EUROPE-MEDITERRANEAN (Including 2/3 of Private Banking in Turkey) | |||||
| Revenues | 606 | 625 | 614 | 661 | 607 |
| Operating Expenses and Dep. | -431 | -442 | -403 | -406 | -450 |
| Gross Operating Income | 176 | 182 | 212 | 254 | 157 |
| Cost of Risk | -96 | -96 | -112 | -109 | -150 |
| Operating Income | 80 | 86 | 100 | 145 | 8 |
| Share of Earnings of Equity-Method Entities | 50 | 46 | 44 | 42 | 42 |
| Other Non Operating Items | 2 | 1 | 0 | -2 | 1 |
| Pre-Tax Income | 132 | 133 | 145 | 185 | 51 |
| Allocated Equity (€bn, year to date) | 5.1 | 5.4 | 5.4 | 5.4 | 5.3 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
|---|---|---|---|---|---|
| BANCWEST (Including 100% of Private Banking in United States)* | |||||
| Revenues | 773 | 735 | 702 | 731 | 667 |
| Operating Expenses and Dep. | -534 | -481 | -465 | -466 | -470 |
| Gross Operating Income | 239 | 253 | 237 | 265 | 197 |
| Cost of Risk | -25 | 4 | -19 | -16 | -19 |
| Operating Income | 214 | 257 | 218 | 249 | 178 |
| Share of Earnings of Equity-Method Entities | 0 | 0 | 0 | 0 | 0 |
| Other Non Operating Items | 10 | 2 | 25 | 1 | 3 |
| Pre-Tax Income | 225 | 260 | 243 | 250 | 180 |
| Income Attributable to Wealth and Asset Management | -3 | -3 | -3 | -2 | -2 |
| Pre-Tax Income of BANCWEST | 221 | 257 | 240 | 248 | 178 |
| Allocated Equity (€bn, year to date) | 6.4 | 6.3 | 6.3 | 6.3 | 6.0 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| BANCWEST (Including 2/3 of Private Banking in United States) | |||||
| Revenues | 762 | 724 | 692 | 721 | 658 |
| Operating Expenses and Dep. | -526 | -474 | -457 | -459 | -463 |
| Gross Operating Income | 236 | 250 | 234 | 262 | 195 |
| Cost of Risk | -25 | 4 | -19 | -16 | -19 |
| Operating Income | 211 | 255 | 215 | 247 | 175 |
| Non Operating Items | 10 | 2 | 25 | 1 | 3 |
| Pre-Tax Income | 221 | 257 | 240 | 248 | 178 |
| Allocated Equity (€bn, year to date) | 6.4 | 6.3 | 6.3 | 6.3 | 6.0 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| INSURANCE | |||||
| Revenues | 456 | 604 | 579 | 562 | 575 |
| Operating Expenses and Dep. | -309 | -302 | -278 | -276 | -301 |
| Gross Operating Income | 147 | 302 | 301 | 286 | 275 |
| Cost of Risk | -1 | -4 | 2 | -4 | 0 |
| Operating Income | 146 | 298 | 304 | 282 | 275 |
| Share of Earnings of Equity-Method Entities | 55 | 40 | 28 | 60 | 42 |
| Other Non Operating Items | -3 | -1 | 0 | 1 | 0 |
| Pre-Tax Income | 199 | 337 | 332 | 343 | 316 |
| Allocated Equity (€bn, year to date) | 7.4 | 7.4 | 7.3 | 7.3 | 7.3 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| WEALTH AND ASSET MANAGEMENT | |||||
| Revenues | 723 | 789 | 739 | 764 | 720 |
| Operating Expenses and Dep. | -567 | -605 | -558 | -579 | -566 |
| Gross Operating Income | 156 | 184 | 181 | 185 | 154 |
| Cost of Risk | 3 | -7 | -1 | -16 | -1 |
| Operating Income | 159 | 177 | 180 | 169 | 153 |
| Share of Earnings of Equity-Method Entities | 8 | 11 | 10 | 14 | 8 |
| Other Non Operating Items | 0 | -3 | 2 | 0 | 3 |
| Pre-Tax Income | 167 | 185 | 191 | 183 | 165 |
| Allocated Equity (€bn, year to date) | 2.1 | 2.2 | 2.2 | 2.2 | 2.2 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
|---|---|---|---|---|---|
| CORPORATE AND INSTITUTIONAL BANKING | |||||
| Revenues | 2,686 | 2,612 | 2,567 | 3,014 | 3,313 |
| Operating Expenses and Dep. | -2,258 | -1,976 | -1,955 | -2,051 | -2,475 |
| Gross Operating Income | 428 | 636 | 612 | 963 | 838 |
| Cost of Risk | -28 | -63 | -40 | -14 | -96 |
| Operating Income | 400 | 574 | 572 | 948 | 742 |
| Share of Earnings of Equity-Method Entities | -3 | 10 | 2 | 13 | 8 |
| Other Non Operating Items | 6 | -27 | -2 | 20 | 136 |
| Pre-Tax Income | 403 | 558 | 573 | 981 | 885 |
| Allocated Equity (€bn, year to date) | 21.9 | 21.6 | 21.6 | 21.5 | 20.6 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| CORPORATE BANKING | |||||
| Revenues | 929 | 1,126 | 877 | 1,015 | 988 |
| Operating Expenses and Dep. | -693 | -606 | -584 | -611 | -669 |
| Gross Operating Income | 236 | 520 | 293 | 404 | 319 |
| Cost of Risk | -55 | -69 | -50 | 55 | -73 |
| Operating Income | 181 | 451 | 243 | 459 | 246 |
| Non Operating Items | 0 | -10 | -1 | 32 | 139 |
| Pre-Tax Income | 181 | 441 | 242 | 491 | 385 |
| Allocated Equity (€bn, year to date) | 12.2 | 11.4 | 11.4 | 11.3 | 11.0 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| GLOBAL MARKETS | |||||
| Revenues | 1,318 | 1,053 | 1,245 | 1,526 | 1,886 |
| incl. FICC | 890 | 682 | 766 | 900 | 1,159 |
| incl. Equity & Prime Services | 428 | 371 | 478 | 626 | 728 |
| Operating Expenses and Dep. | -1,184 | -980 | -1,001 | -1,073 | -1,450 |
| Gross Operating Income | 134 | 73 | 243 | 453 | 436 |
| Cost of Risk | 27 | 4 | 11 | -72 | -23 |
| Operating Income | 160 | 77 | 254 | 380 | 413 |
| Share of Earnings of Equity-Method Entities | -4 | 6 | 4 | 2 | 6 |
| Other Non Operating Items | 6 | -12 | -2 | 0 | -1 |
| Pre-Tax Income | 163 | 72 | 256 | 382 | 418 |
| Allocated Equity (€bn, year to date) | 9.1 | 9.5 | 9.5 | 9.5 | 9.0 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
| SECURITIES SERVICES | |||||
| Revenues | 440 | 433 | 444 | 473 | 439 |
| Operating Expenses and Dep. | -382 | -390 | -369 | -368 | -356 |
| Gross Operating Income | 59 | 43 | 75 | 106 | 83 |
| Cost of Risk | 0 | 3 | 0 | 3 | 0 |
| Operating Income | 59 | 45 | 75 | 109 | 83 |
| Non Operating Items | 0 | 0 | 0 | 0 | 0 |
| Pre-Tax Income | 59 | 45 | 75 | 109 | 83 |
| Allocated Equity (€bn, year to date) | 0.7 | 0.7 | 0.7 | 0.7 | 0.6 |
| €m | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 |
|---|---|---|---|---|---|
| CORPORATE CENTRE | |||||
| Revenues | 618 | 151 | 198 | 352 | 209 |
| Operating Expenses and Dep. | -182 | -381 | -302 | -395 | -258 |
| Incl. Restructuring, Transformation and Adaptation Costs | -46 | -286 | -160 | -217 | -130 |
| Gross Operating Income | 435 | -230 | -103 | -43 | -50 |
| Cost of Risk | 9 | -24 | -6 | -24 | 2 |
| Costs related to the comprehensive settlement with US authorities | 0 | -100 | 0 | 0 | 0 |
| Operating Income | 444 | -354 | -109 | -67 | -47 |
| Share of Earnings of Equity-Method Entities | 21 | 5 | 14 | 12 | 15 |
| Other Non Operating Items | 10 | -622 | 11 | 410 | 76 |
| Pre-Tax Income | 475 | -970 | -84 | 354 | 43 |
BALANCE SHEET AS AT 31 MARCH 2016
| In millions of euros | 31/03/2016 | 31/12/2015 |
|---|---|---|
| ASSETS | ||
| Cash and amounts due from central banks | 147,010 | 134,547 |
| Financial instruments at fair value through profit or loss | ||
| Trading securities | 154,215 | 133,500 |
| Loans and repurchase agreements | 169,825 | 131,783 |
| Instruments designated as at fair value through profit or loss | 82,078 | 83,076 |
| Derivative financial Instruments | 363,226 | 336,624 |
| Derivatives used for hedging purposes | 20,425 | 18,063 |
| Available-for-sale financial assets | 261,126 | 258,933 |
| Loans and receivables due from credit institutions | 42,665 | 43,427 |
| Loans and receivables due from customers | 691,620 | 682,497 |
| Remeasurement adjustment on interest-rate risk hedged portfolios | 8,235 | 4,555 |
| Held-to-maturity financial assets | 7,638 | 7,757 |
| Current and defered tax assets | 7,705 | 7,865 |
| Accrued income and other assets | 121,613 | 108,018 |
| Equity-method investments | 7,207 | 6,896 |
| Investment property | 1,853 | 1,639 |
| Property, plant and equipment | 21,371 | 21,593 |
| Intangible assets | 3,160 | 3,104 |
| Goodwill | 10,049 | 10,316 |
| TOTAL ASSETS | 2,121,021 | 1,994,193 |
| LIABILITIES | ||
| Due to central banks | 5,761 | 2,385 |
| Financial instruments at fair value through profit or loss | ||
| Trading securities | 83,830 | 82,544 |
| Borrowings and repurchase agreements | 193,744 | 156,771 |
| Instruments designated as at fair value through profit or loss | 50,590 | 53,118 |
| Derivative financial Instruments | 352,572 | 325,828 |
| Derivatives used for hedging purposes | 22,105 | 21,068 |
| Due to credit institutions | 94,016 | 84,146 |
| Due to customers | 710,173 | 700,309 |
| Debt securities | 167,210 | 159,447 |
| Remeasurement adjustment on interest-rate risk hedged portfolios | 7,940 | 3,946 |
| Current and deferred tax liabilities | 3,375 | 2,993 |
| Accrued expenses and other liabilities | 112,387 | 88,629 |
| Technical reserves of insurance companies | 186,788 | 185,043 |
| Provisions for contingencies and charges Subordinated debt |
11,364 16,691 |
11,345 16,544 |
| TOTAL LIABILITIES | 2,018,546 | 1,894,116 |
| CONSOLIDATED EQUITY | ||
| Share capital, additional paid-in capital and retained earnings | 90,220 | 82,839 |
| Net income for the period attributable to shareholders | 1,814 | 6,694 |
| Total capital, retained earnings and net income for the period attributable to shareholders Changes in assets and liabilities recognised directly in equity |
92,034 6,515 |
89,533 6,736 |
| Shareholders' equity | 98,549 | 96,269 |
| Retained earnings and net income for the period attributable to minority interests | 3,810 | 3,691 |
| Changes in assets and liabilities recognised directly in equity Total minority interests |
116 3,926 |
117 3,808 |
| TOTAL CONSOLIDATED EQUITY | 102,475 | 100,077 |
| TOTAL LIABILITIES AND EQUITY | 2,121,021 | 1,994,193 |
| SOLID ORGANIC CAPITAL GENERATION IN A CHALLENGING ENVIRONMENT THIS QUARTER 2 |
|
|---|---|
| RETAIL BANKING & SERVICES 4 | |
| DOMESTIC MARKETS 4 | |
| INTERNATIONAL FINANCIAL SERVICES 7 | |
| CORPORATE AND INSTITUTIONAL BANKING (CIB) 10 | |
| CORPORATE CENTRE 11 | |
| FINANCIAL STRUCTURE 11 | |
| CONSOLIDATED PROFIT AND LOSS ACCOUNT 13 | |
| 1Q16 – RESULTS BY CORE BUSINESSES 14 | |
| QUARTERLY SERIES 15 | |
| BALANCE SHEET AS AT 31 MARCH 2016 24 | |
The figures included in this presentation are unaudited. On 29 March 2016, BNP Paribas issued a restatement of its quarterly results for 2015 reflecting, in particular (i) an increase in the capital allocated to each business line to 11% of risk-weighted assets, compared to 9% previously, (ii) the charge of subordination costs of Additional Tier 1 and Tier 2 debt issued by the Group to the divisions and business lines, a review of the way it charges and remunerates liquidity between the Corporate Centre and the business lines and the adaptation of the allocation practices for revenues and operating expenses of Treasury activities within CIB, (iii) the allocation to the divisions and business lines of the contribution to the Single Resolution Fund, the reduction of the French systemic tax and new contributions to the deposit guarantee funds of BNL and Luxembourg Retail Banking which had been temporarily booked in the operating expenses of the Corporate Centre and (iv) some limited internal transfers of business activities and results. The 2015 quarterly result series have been restated reflecting these effects as if they had occurred on 1st January 2015. This presentation is based on the restated 2015 quarterly series.
This presentation includes forward-looking statements based on current beliefs and expectations about future events. Forward-looking statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future events, operations, products and services, and statements regarding future performance and synergies. Forward-looking statements are not guarantees of future performance and are subject to inherent risks, uncertainties and assumptions about BNP Paribas and its subsidiaries and investments, developments of BNP Paribas and its subsidiaries, banking industry trends, future capital expenditures and acquisitions, changes in economic conditions globally or in BNP Paribas' principal local markets, the competitive market and regulatory factors. Those events are uncertain; their outcome may differ from current expectations which may in turn significantly affect expected results. Actual results may differ materially from those projected or implied in these forward looking statements. Any forward-looking statement contained in this presentation speaks as of the date of this presentation. BNP Paribas undertakes no obligation to publicly revise or update any forward-looking statements in light of new information or future events. It should be recalled in this regard that the Supervisory Review and Evaluation Process is carried out each year by the European Central Bank, which can modify each year its capital adequacy ratio requirements for BNP Paribas.
The information contained in this presentation as it relates to parties other than BNP Paribas or derived from external sources has not been independently verified and no representation or warranty expressed or implied is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of, the information or opinions contained herein. None of BNP Paribas or its representatives shall have any liability whatsoever in negligence or otherwise for any loss however arising from any use of this presentation or its contents or otherwise arising in connection with this presentation or any other information or material discussed.
The sum of values contained in the tables and analyses may differ slightly from the total reported due to rounding.
Investor Relations & Financial Information
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