The Board of Directors of BNP Paribas met on 3 November 2010. The meeting was chaired by Michel Pébereau and the Board examined the Group's results for the third quarter and the first nine months of the year.
QUARTERLY NET PROFITS OF 1.9 BILLION EUROS
Thanks to its active role in financing the real economy and the confirmed decline in the cost of risk, BNP Paribas Group performed very well this quarter despite an uncertain economic environment. The Group generated net profits (attributable to shareholders) of 1,905 million euros, up by 46.0% compared to the third quarter 2009. This performance again demonstrated the effectiveness of the Group's business model.
At 10,856 million euros, revenues were up by 1.8% compared to the third quarter 2009, the growth in Retail Banking's and Investment Solutions' businesses offset the fall in CIB's revenues compared to the high base in the third quarter 2009. Again this quarter, there was a negative impact from the own debt revaluation (-110 million euros compared to -308 million euros in the third quarter 2009). Operating expenses, which were 6,620 million euros, were up 9.7%. This negative jaws effect comes exclusively from restructuring costs (176 million euros compared to 33 million euros in the third quarter 2009 when Fortis's integration was just getting under way) and costs from CIB whose exceptionally low cost base in the third quarter 2009 had been reported as non significant at the time. At 1,222 million euros, or 72 basis points of outstanding customer loans, the cost of risk was down sharply (-46.9% compared to the third quarter 2009) helping the Group generate 3,014 million euros in operating income, up by 29.6% compared to the third quarter 2009. Pre-tax income totalled 3,151 million euros (+28.9%). CIB's and Investment Solution's performance remained strong and the rebound in income from Retail Banking (which more than doubled) rebalanced the divisions' income contributions.
For the first nine months of the year, the Group's revenues totalled 33,560 million euros, up by 11.4% compared to the first nine months of 2009 and gross operating income moved up 7.7%. At constant scope and exchange rates, revenues were comparable (-0.3%) to the value in the first nine months of 2009 and operating expenses (excluding restructuring costs) fell 1.0%. At 3,640 million euros, the cost of risk was down sharply (-43.7%) compared to the first nine months of 2009. Thus, net income attributable to shareholders was 6,293 million euros, increasing by 40.9% during the period. This solid performance illustrates the Group's capacity to generate capital and further strengthens it.
Earnings per ordinary share was 5.1 euros compared to 3.7 euros in the first nine months of 2009. The annualised return on equity was 13.2%, up 2.2 points for the period.
The merger of BNP Paribas Fortis and BGL BNP Paribas's entities with those of the Group is being carried out swiftly thanks to the support of the teams across all the business units, functions and territories. During the first nine months of the year, 292 million euros in synergies were booked, added to the 120 million euros already recorded in the 2009 accounts, more than half of which came from the CIB division. In addition to those 412 million already recorded, 200 million euros in synergies have already been achieved and will be reflected in the accounts over the coming quarters. So, the 612 million in total synergies already achieved are more than six months ahead of the schedule announced.
VERY GOOD OPERATING PERFORMANCE
Again this quarter, all the Group's divisions continued their business development and made a substantial positive contribution to the Group's results.
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