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BNP Paribas Group: Results as at 31 December 2014

  • 05.02.2015

The Board of Directors of BNP Paribas met on 4 February 2015. The meeting was chaired by Jean Lemierre and the Board examined the Group’s results for the fourth quarter and endorsed the 2014 financial statements.

BNP Paribas 2014 results

GOOD OPERATING PERFORMANCE BUT SIGNIFICANT IMPACT OF ONE-OFF ITEMS IN 2014


The Group’s results reflect this year the negative impact of significant one-off items. Excluding these items, the Group delivered a good operating performance thanks to its diversified business model and to the trust of its institutional, corporate and individual clients. The Group made three bolt-on acquisitions this year with the buyout of the remaining 50% equity interest in LaSer, as well as the acquisitions of Bank BGZ in Poland and of DAB Bank in Germany.

Revenues totalled 39,168 million euros, up 2.0% compared to 2013. They included this year one-off items that totalled -324 million euros (+147 million euros in 2013): a -459 million euro Own Credit Adjustment (OCA) and own credit risk included in derivatives (DVA), 
-166 million euros as a result of the introduction of the Funding Valuation Adjustment (FVA) at Fixed Income and +301 million euros in capital gains from the one-off sale of securities. Excluding one-off items, revenues rose by 3.2%. 

The revenues of the operating divisions rose by 1.9% (1) compared to 2013, with in particular a very good performance by the specialised businesses. Revenues were up in all the operating divisions: +2.0% (2) at Retail Banking , +3.7% (2) at Investment Solutions and +2.1% (1) for Corporate and Investment Banking. 

Operating expenses, which amounted to 26,526 million euros, were up by 2.1%. They included the one-off impact of 717 million euros in Simple & Efficient transformation costs (661 million euros in 2013).

The operating expenses of the operating divisions were up 1.7% (2). The increase related to the business development plans is limited thanks to the effects of Simple & Efficient. Operating expenses were up by 1.2% (2) at Retail Banking (3), 2.9% (2) at Investment Solutions and 2.2% (2) for CIB.

Gross operating income was up 1.6% at 12,642 million euros (+5.6% excluding exceptional items). It was up by 2.2% (1) for the operating divisions.

The Group’s cost of risk was down 2.5%, at 3,705 million euros (57 basis points of outstanding customer loans), reflecting the Group’s good risk control. It includes a one-off 100 million euro provision due to the situation in Eastern Europe.

The Group booked the impact of the comprehensive settlement with the U.S. authorities regarding the review of certain USD transactions which included, among other things, the payment by BNP Paribas of a total of 8.97 billion dollars in penalties (6.6 billion euros). Given the amounts already provisioned, the Group booked this year a one-off charge for a total amount of 6 billion euros, of which 5,750 millions in penalties, and 250 million euros corresponding to the future costs of the remediation plan announced as part of the comprehensive settlement. 

Non operating items totalled 212 million euros. They included in particular this year a -297 million euro impairment of BNL bc’s goodwill. Non operating items totalled +397 million euros in 2013 and included in particular -171 million euros in one-off items.

Pre-tax income thus came to 3,149 million euros compared to 8,239 millions in 2013. Excluding one-off items(4), it was up by 8.9%.

The Group generated 157 million euros in net income attributable to equity holders (4,818 million euros in 2013). Excluding one-off items(4), it totalled 7,049 million euros.

The Group’s balance sheet is rock-solid. At 31 December 2014, the fully loaded Basel 3 common equity Tier 1 ratio(5), which factors in the results of the banks’ Asset Quality Review (AQR) performed by the European Central Bank (ECB) and the early introduction of Prudent Valuation Adjustment (PVA), was 10.3%. The fully loaded Basel 3 leverage ratio (6) came to 3.6% (7). The Liquidity Coverage Ratio was 114%. Lastly, the Group’s immediately available liquidity reserve was 291 billion euros (247 billion euros as at 31 December 2013), equivalent to over one year of room to manoeuvre in terms of wholesale funding.

The net book value per share (8) was 61.7 euros, or a compounded annualised growth rate of 4.5% since 31st December 2008. 

The Board of Directors will propose to shareholders at the Shareholders’ Meeting to pay out the same amount of dividend paid last year, i.e. €1.50 per share to be paid in cash.

Lastly, the Group is actively implementing the remediation plan agreed as part of the comprehensive settlement with the U.S. authorities and is reinforcing its internal control and compliance setup.

 

 


In the fourth quarter 2014, revenues came to 10,150 million euros, up 7.2% compared to the fourth quarter 2013. They benefited in particular from the scope effect as a result of LaSer becoming a wholly-owned company and the acquisition of Bank BGZ in Poland. One-off revenue items were negligeable as in the fourth quarter 2013. At constant scope and exchange rates, revenues of the operating divisions were up by 1.1% with a 3.3% rise at Retail Banking (9) and a 1.5% increase at Investment Solutions, and a 3.9% decline for CIB. 

Operating expenses were up 2.0%, at 7,004 million euros. They included this quarter -229 million euros in one-off Simple & Efficient transformation costs (-287 million euros in the fourth quarter 2013). The rise was 3.0% excluding one-off items. However, at constant scope and exchange rates, operating expenses of the operating divisions decreased by 1.2%. 

Gross operating income came to 3,146 million euros, up by 20.8% compared to the fourth quarter 2013. It was up 16.6% excluding one-off items. At constant scope and exchange rates, it was up by 6.2% for the operating divisions. 

The cost of risk, at 1,012 million euros, was stable overall (-0.4% compared to the fourth quarter 2013) and totalled 60 basis points of outstanding customer loans. 

The Group booked the one-off impact of an additional 50 million euro provision related to the future costs of the remediation plan announced as part of the comprehsive settlement with the U.S. authorities. In the fourth quarter 2013, the Group had booked a 798 million euro provision (1.1 billion dollars), in anticipation of this settlement.

Non operating items totalled -190 million euros. They included in particular this quarter a -297 million euro impairment of BNL bc’s goodwill. They were -30 million euros in the fourth quarter 2013 and included -252 million euros in one-off items.

Pre-tax income thus came to 1,894 million euros (761 million euros in the fourth quarter 2013). Excluding one-off items (10), it was up 17.5% compared to the same period a year earlier.

Thus in the fourth quarter 2014, BNP Paribas posted 1,304 million euros in net income attributable to equity holders (110 million euros in the fourth quarter 2013). Excluding the impact of one-off items (10), it totalled 1,785 million euros.

 


 (1)At constant scope and exchange rates, excluding one-off items
 (2) At constant scope and exchange rates
 (3)Including 100% of Private Banking of the domestic markets, BancWest and TEB (excluding PEL/CEL effects)
 (4)See page 33 in the Press Release
 (5)Ratio taking in account all the CRD4 rules with no transitory provisions
 (6)Ratio taking in account all the CRD4 rules with no transitory provisions, calculated according to the delegated act of the European Commission dated 10 October 2014
 (7)Including the forthcoming replacement of Tier 1 instruments that have become ineligible with equivalent eligible instruments
 (8)Not revaluated
 (9)Including 100% of Private Banking of the domestic markets, BancWest and TEB (excluding PEL/CEL effects)
 (10)See page 33 in the Press Release

 

◦ Read the press release “BNP Paribas Group: Results as at 31 December 2014”
◦ View the slides of the presentation
◦ Consult the consolidated financial statements (unaudited)
◦ View the Quarterly Series

Press contact(s)

Bertrand Cizeau
Tel: + 33 1 42 98 33 53
bertrand.cizeau [at] bnpparibas (dot) com

Carine Lauru
Tel: + 33 1 42 98 13 36
carine.lauru [at] bnpparibas (dot) com

Julia Boyce
Tel : +33(0)1 43 16 82 04
julia.boyce [at] bnpparibas (dot) com