The Board of Directors of BNP Paribas met on 1st August 2012. The meeting was chaired by Baudouin Prot and the Board examined the Group’s results for the second quarter 2012.
GOOD RESULTS IN A CHALLENGING ECONOMIC ENVIRONMENT
BNP Paribas reported good performances this quarter despite a challenging environment marked by another slowdown of Europe’s economic activity and a new market crisis. The Group’s adaptation plan in response to new regulations is almost achieved and well ahead of schedule: 90% of the target to improve the common equity Tier 1 ratio by 100bp was already attained. Thus, with a Basel 3 (fully loaded (1) ) ratio at 8.9%, the 9% target by 31 December 2012 is virtually achieved, 6 months ahead of schedule.
Revenues were 10,098 million euros, down 8.0% compared to the second quarter 2011. Revenues were up in Retail Banking (+0.5%(2) ) and in Investment Solutions (+2.2%) but down 23.6% in CIB given the challenging market environment and the reduction of outstandings in line with the adaptation plan.
Operating expenses, which totalled 6,337 million euros, were down 4.0% thanks to actions taken to adapt costs to the new environment. CIB’s operating expenses fell 15.7%, excluding adaptation costs.
Gross operating income thus declined 14.1%, to 3,761 million euros.
The Group’s cost of risk, at 853 million euros, or 50 basis points of outstanding customer loans, fell 36.8% compared to the second quarter 2011. Excluding the 534 million euro impact of the Greek assistance programme in the second quarter 2011, it was up 4.5%, remaining at a low level, which illustrates the quality of the portfolio and the good control of the Group’s risks.
Hence, operating income, which came to 2,908 million euros, edged down only 4.0% compared to the second quarter 2011.
Thanks to the decline in operating expenses and the good control of its cost of risk, BNP Paribas posted, in a challenging environment, a net income of 1,848 million euros, down 13.2% compared to the second quarter 2011.
For the first half of the year as a whole, the Group demonstrated that its results held up well. Revenues totalled 19,984 million euros, down 11.8% compared to the first half 2011, given in particular the negative 557 million euro impact of the own debt revaluation in the first half 2012. The operating divisions’ revenues thus contracted only 5.2%.
Operating expenses edged down 1.1%, to 13,184 million euros, such that gross operating income came to 6,800 million euros, down 27.2% compared to the first half 2011. This decline was only 12.1% for the operating divisions.
At 1,798 million euros, the cost of risk was down 20.8% compared to the first half 2011, which includes the 534 million euro impact of the Greek assistance programme in the second quarter 2011.
Given the 1,790 million euros of exceptional income booked after the Group’s sale of a 28.7% stake in Klépierre SA in the first quarter of this year, net income attributable to equity holders was 4,715 million euros for the first half of this year, almost unchanged (-0.6%) compared to the same period a year earlier. Annualised return(3) on equity for the first half of this year, excluding the exceptional income from the sale of Klépierre, was 9.0%. The net book value per share(4) was €59.5, or a compounded annual growth rate of 6.8% since 31 December 2008.
(1) Common equity tier 1 ratio taking into account all the CRD4 rules with no transitory provision and as expected by BNP Paribas.
(2) Including 100% of Private Banking in domestic networks, excluding PEL/CEL effects.
(3) For which the annualisation has been restated for own debt revaluation
(4) Not revaluated