€1.6BN IN NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS IN A CHALLENGING ECONOMIC ENVIRONMENT
In a lacklustre economic environment in Europe, the Group's revenues totalled 10,055 million euros, up 1.7% compared to the first quarter 2012. It included this quarter the positive impact of two exceptional items for a net total of 149 million euros: -215 million euros in own credit adjustment and +364 million euros as a result of the first-time adoption of Debit Value Adjustment (DVA) under IFRS 13. The revenues of the operating divisions dropped 5.9%, although Retail Banking(1) (+0.2% (2)) and Investment Solutions (+3.4%(2)) held up well, while this quarter was a transition for CIB after the end of the adaptation plan (-20.2% (2)).
Operating expenses, which came to 6,514 million euros, improved 4.8%, showing very good cost control. They included this quarter a one-off 155 million euros transformation cost associated with Simple & Efficient. Retail Banking's(1) operating expenses edged down 1.9%(2), Investment Solutions' inched up 1.5%(2), while CIB's declined 15.2%(2).
Gross operating income rose 16.4% during the period to 3,541 million euros. It was down, however, 5.3% for the operating divisions.
The Group's cost of risk, at 978 million euros or 60 basis points of outstanding customer loans, rose only 3.5% compared to the first quarter 2012 and still remained low, illustrating the good control of risks.
Non-operating items totalled 52 million euros this quarter. They were 1,844 million euros in the first quarter of 2012 due to 1,790 million euros in one-off income booked after the Group sold its 28.7% stake in Klépierre SA.
The Group thus posted 2,615 million euros in pre-tax income, down 33.6% compared to the same quarter a year earlier. The pre-tax income of the operating divisions was down only 8.1%.
BNP Paribas thus reported 1,584 million euros in net income (attributable to equity holders), 44.8% lower compared to the first quarter 2012. Exceptional items had no impact this quarter on net income (-6 million euros). Their impact in the first quarter 2012, after factoring in taxes and minority interests, was +829 million euros.
The Group's solvency was very high with a Basel 2.5 common equity Tier 1 (CRD3) ratio at 11.7% and a fully loaded Basel 3 common equity Tier 1 ratio(3) at 10.0%, confirming BNP Paribas as one of the world's best capitalised global banks.
Net book value per share(4) was 61.7 euros, with a compounded annual growth rate of 6.5% since 31 December 2008, demonstrating BNP Paribas' capacity to continue to grow the net book value per share throughout the cycle.
Lastly, Simple & Efficient, the ambitious programme to simplify the Group's way of functioning and improve operating efficiency, got off to a quick start. One hundred and fifty five million euros in transformation costs were booked this quarter and many projects are in the process of being launched, such as early retirement plans already initiated at BNPP Fortis and BNL, plans to streamline the total number of software programmes and to industrialise computer programme development and plans to go paperless (using electronic documents and archiving).
The Group is set to launch BNP Paribas' European digital bank, a pure mobile and online banking player, as part of its 2014-2016 business development plan.
Read the press release "BNP Paribas Group: Results as at 31 March 2013"
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(1) Including 100% of Private Banking in the domestic networks, excluding PEL/CEL effects
(2) At constant scope and exchange rates
(3) Common equity tier 1 ratio taking into account all the CRD4 rules with no transitory provision that will enter into force only on 1st January 2019, and as expected by BNP Paribas
(4) Not reevaluated