BNP Paribas - Update regarding the agenda of the Investor Day

Given the gravity of the current situation and the humanitarian impacts of the aggression against Ukraine, BNP Paribas Group has decided to postpone the presentations that were scheduled for 14 March 2022 for the purpose of detailing its business lines’ projects and initiatives in the context of its 2025 strategic plan. These presentations will be rescheduled by the summer in a more appropriate context.

On 8 February 2022, the Group presented the main axes and priorities of its 2025 strategic plan and related financial ambitions. This presentation is available on the investor website at https://invest.bnpparibas.com.

Based on an initial and overall analysis of the medium- and long-term impacts of current events, BNP Paribas confirms the Group’s overall financial objectives for 2025 as presented on 8 February 2022¹, given the margins of prudence taken initially in the plan. In this environment, the Group benefits more than ever from the demonstrated resilience and ability to adapt of its diversified and integrated model and from the quality of its risk profile.

With its 2025 Strategic Plan, the Group and all its teams are mobilised to pursue its development in support of customers and society as a whole over time and in all environments.

The gross exposures off- and on-balance sheet on Ukraine and Russia² are limited. They amounted for Ukraine, to 0.09% of the Group's total commitments³ (around 1.7 billion euros) and, for Russia to 0.07% (around 1.3 billion euros) at 31 December 2021. Considering the way BNP Paribas operates in those two markets and secures its activities with guarantees and collaterals at a high level, the net residual combined exposures of BNP Paribas for Russia and Ukraine stand at around 500 million euros.

Furthermore, the Group rigorously and diligently ensures the implementation of the requisite measures for the full application of international sanctions and public authorities’ decisions as soon as they are issued.

The Group closely monitors developments in Russia and Ukraine and is fully mobilised to support customers and all employees to the extent possible. In particular, the Group has done everything within its power to provide for the support and safety of its employees in Ukraine, where the Group operates through Ukrsibbank in partnership with the EBRD. BNP Paribas also mobilised 10 million euros to support the actions towards Ukraine of UNHCR, the Red Cross and Doctors Without Borders. It also opened the Rescue & Recover Fund to collect donations from employees and doubles them.

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Appendix

As stated above, based on an initial and overall analysis of the medium- and long-term impacts of current events, BNP Paribas confirms the Group’s overall financial objectives for 2025 as presented on 8 February 2022, given the margins of prudence taken initially in the plan. In this environment, the Group benefits more than ever from the demonstrated resilience and ability to adapt of its diversified and integrated model and from the quality of its risk profile.

These overall financial objectives for 2025 are as follows:

• On average, the Group’s objective is revenue growth of more than 3.5% annually⁴ with a positive jaws effect of more than 2 percentage points⁵ on average.
• The Group is thus targeting average annual growth in net income of more than 7% throughout the period, thus raising its ROTE to more than 11%, while maintaining a target CET1 ratio of 12% in 2025, including the full impact of the Basel 3 finalisation (CRR3), and of 12.9% in 2024⁶.
• The Group’s targeted ordinary pay-out ratio stands at 60%, including a minimum cash pay-out of 50%⁷.

These objectives continue to apply on the Group perimeter without Bank of the West’s contribution.

Finally, the Group confirms that the Board of Directors will propose to the shareholders’ Annual General Meeting on 17 May 2022 to pay out a dividend of 3.67 euros in cash, equivalent to a 50% pay-out ratio of 2021 results. This payment will raise the total pay-out on the year 2021 to 60%, when factoring in the 900 million euro share buyback program executed between 1 November 2021 and 6 December 2021, which was equivalent to a 10% pay-out ratio on 2021 results.

[1] See appendix

[2] Gross commitments, off- and on-balance sheet, on and off-shore, for all Group’s businesses, on counterparties whose cash flows are largely dependent on Ukraine (respectively Russia) whatever their country of incorporation – including counterparty risk (Effective Expected Positive Exposure for derivatives)

[3] Gross commitments, on- and off-balance sheet, unweighted

[4] 2021-2025 CAGR of revenues

[5] 2021-2025 CAGR of revenues less 2021-2025 CAGR of operating expenses

[6] Return on tangible equity with the full impact of the finalisation of Basel 3 (CRR3); trajectories based on known regulatory constraints and on the full impact arising from the finalisation of Basel 3 (CRR3), estimated by the Group at 8% of risk-weighted assets in 2025

[7] Subject to the approval of the Annual General Meeting